Emerge Energy Services (NYSE: EMES) and Superior Energy Services (NYSE:SPN) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Volatility & Risk

Emerge Energy Services has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Superior Energy Services has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500.

Insider and Institutional Ownership

31.0% of Emerge Energy Services shares are owned by institutional investors. 2.9% of Superior Energy Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Emerge Energy Services and Superior Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emerge Energy Services -14.29% -170.44% -25.17%
Superior Energy Services -31.24% -28.82% -10.86%

Analyst Recommendations

This is a summary of current ratings and target prices for Emerge Energy Services and Superior Energy Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emerge Energy Services 0 3 4 0 2.57
Superior Energy Services 0 13 8 0 2.38

Emerge Energy Services presently has a consensus target price of $18.17, suggesting a potential upside of 127.08%. Superior Energy Services has a consensus target price of $16.33, suggesting a potential upside of 64.48%. Given Emerge Energy Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Emerge Energy Services is more favorable than Superior Energy Services.

Earnings and Valuation

This table compares Emerge Energy Services and Superior Energy Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Emerge Energy Services $231.85 million 1.04 -$26.10 million ($1.14) -7.02
Superior Energy Services $1.55 billion 0.98 -$16.52 million ($3.20) -3.10

Superior Energy Services has higher revenue and earnings than Emerge Energy Services. Emerge Energy Services is trading at a lower price-to-earnings ratio than Superior Energy Services, indicating that it is currently the more affordable of the two stocks.

Summary

Superior Energy Services beats Emerge Energy Services on 7 of the 13 factors compared between the two stocks.

About Emerge Energy Services

Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company operates through Sand segment. The Company conducts its Sand operations through its subsidiary, Superior Silica Sands LLC (SSS). The Company’s Sand business mines, processes and distributes silica sand, an input for the hydraulic fracturing of oil and gas wells. As of December 31, 2016, its Wisconsin facilities consisted of three dry plants located in Arland, Barron and New Auburn, Wisconsin, with a total permitted capacity of 6.3 million finished tons per year, and five wet plants and mine complexes. As of December 31, 2016, its dry plant in Kosse, Texas, had a capacity of 600,000 tons per year that is supplied by a separate mine and wet plant that processes local Texas sand. As of December 31, 2016, the Company also had 14 transload facilities located throughout North America in the basins where it delivers its sand, as well as a fleet of 5,573 railcars.

About Superior Energy Services

Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

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