Critical Review: Archrock (AROC) vs. Ion Geophysical (IO)
Archrock (NYSE: AROC) and Ion Geophysical (NYSE:IO) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.
Insider and Institutional Ownership
90.3% of Archrock shares are held by institutional investors. Comparatively, 34.1% of Ion Geophysical shares are held by institutional investors. 2.5% of Archrock shares are held by company insiders. Comparatively, 15.2% of Ion Geophysical shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Archrock and Ion Geophysical’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Archrock||$807.07 million||0.85||-$54.55 million||($0.98)||-9.90|
|Ion Geophysical||$172.81 million||0.92||-$65.14 million||($3.00)||-4.43|
Archrock has higher revenue and earnings than Ion Geophysical. Archrock is trading at a lower price-to-earnings ratio than Ion Geophysical, indicating that it is currently the more affordable of the two stocks.
Archrock pays an annual dividend of $0.48 per share and has a dividend yield of 4.9%. Ion Geophysical does not pay a dividend. Archrock pays out -49.0% of its earnings in the form of a dividend.
This table compares Archrock and Ion Geophysical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Archrock and Ion Geophysical, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Archrock presently has a consensus target price of $13.15, suggesting a potential upside of 35.57%. Given Archrock’s higher possible upside, analysts plainly believe Archrock is more favorable than Ion Geophysical.
Risk and Volatility
Archrock has a beta of 3.4, indicating that its share price is 240% more volatile than the S&P 500. Comparatively, Ion Geophysical has a beta of 3.82, indicating that its share price is 282% more volatile than the S&P 500.
Archrock beats Ion Geophysical on 11 of the 14 factors compared between the two stocks.
Archrock Company Profile
Archrock, Inc. is a natural gas contract operations services company. The Company also provides natural gas compression services to customers in the oil and natural gas industry throughout the United States and supplies aftermarket services to customers that own compression equipment in the United States. The Company operates through two segments: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The Company provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs. The aftermarket services segment provides a range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.
Ion Geophysical Company Profile
ION Geophysical Corporation is a technology-focused company. It provides geophysical technology, services and solutions to the global oil and gas industry. Its offerings are designed to enable oil and gas exploration and production (E&P) companies to obtain images of the Earth’s subsurface. It offers services and products through three segments: E&P Technology & Services, E&P Operations Optimization, and Ocean Bottom Services. E&P Technology & Services provides services and products for complex and hard-to-image geologies, such as deepwater subsalt formations in the Gulf of Mexico and offshore East and West Africa and Brazil; unconventional reservoirs, such as those found onshore in shale, tight gas and oil sands formations, and offshore basin-wide seismic data and imaging programs. E&P Operations Optimization combines its Optimization Software and Services and Devices offerings. Ocean Bottom Services consists of OceanGeo, an ocean bottom data acquisition services company.
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