Subsea 7 (OTCMKTS:SUBCY) and Archrock (NYSE:AROC) Head to Head Survey

Archrock (NYSE:AROC) and Subsea 7 (OTCMKTS:SUBCY) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Dividends

Archrock pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. Subsea 7 pays an annual dividend of $1.16 per share and has a dividend yield of 3.4%. Archrock pays out 48.1% of its earnings in the form of a dividend. Subsea 7 pays out 84.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Archrock has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

95.5% of Archrock shares are owned by institutional investors. Comparatively, 0.0% of Subsea 7 shares are owned by institutional investors. 2.9% of Archrock shares are owned by company insiders. Comparatively, 1.0% of Subsea 7 shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Archrock and Subsea 7″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Archrock	$1.49 billion	4.39	$322.29 million	$1.83	20.41
Subsea 7	$7.09 billion	1.41	$411.40 million	$1.38	24.57

Subsea 7 has higher revenue and earnings than Archrock. Archrock is trading at a lower price-to-earnings ratio than Subsea 7, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Archrock has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Subsea 7 has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Archrock and Subsea 7, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archrock	0	2	9	0	2.82
Subsea 7	1	2	0	1	2.25

Archrock currently has a consensus price target of $39.00, indicating a potential upside of 4.39%. Given Archrock’s stronger consensus rating and higher probable upside, analysts plainly believe Archrock is more favorable than Subsea 7.

Profitability

This table compares Archrock and Subsea 7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archrock	21.63%	23.57%	7.80%
Subsea 7	5.76%	9.46%	5.08%

Summary

Archrock beats Subsea 7 on 12 of the 18 factors compared between the two stocks.

About Archrock

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

About Subsea 7

Subsea 7 S.A. delivers offshore projects and services for the energy industry worldwide. It provides subsea field development products and services, including project management, design and engineering, procurement, fabrication, survey, installation, and commissioning of production facilities on the seabed and the tie-back of its facilities to fixed or floating platforms or to the shore. The company also offers engineering, procurement, commissioning, and installation of subsea umbilicals, risers, and flowlines; inspection, repair, maintenance, remote intervention, and integrity management of subsea infrastructure services; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines in shallow water; and hook-up services. In addition, it operates heavy lifting operations and heavy transportation services for renewables structures; and installs offshore wind turbine foundations, as well as engages in the decommissioning of redundant offshore structures. Further, the company provides remotely operated vehicles (ROVs) and tooling services to support exploration and production activities, as well as engineering and advisory services for customers in the oil and gas, renewables, and utilities industries. The company was incorporated in 1993 and is based in Luxembourg, Luxembourg.