Fairmount Santrol (NYSE: FMSA) and Flotek Industries (NYSE:FTK) are both small-cap energy companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Volatility & Risk

Fairmount Santrol has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500. Comparatively, Flotek Industries has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500.

Earnings and Valuation

This table compares Fairmount Santrol and Flotek Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fairmount Santrol $535.01 million 2.46 -$140.19 million $0.05 117.60
Flotek Industries $262.83 million 1.22 -$49.13 million ($0.02) -282.00

Flotek Industries has lower revenue, but higher earnings than Fairmount Santrol. Flotek Industries is trading at a lower price-to-earnings ratio than Fairmount Santrol, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Fairmount Santrol and Flotek Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fairmount Santrol 1 10 10 0 2.43
Flotek Industries 0 0 1 0 3.00

Fairmount Santrol presently has a consensus price target of $5.95, indicating a potential upside of 1.14%. Given Fairmount Santrol’s higher possible upside, analysts plainly believe Fairmount Santrol is more favorable than Flotek Industries.

Profitability

This table compares Fairmount Santrol and Flotek Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fairmount Santrol 1.69% 4.05% 0.86%
Flotek Industries -10.41% -1.64% -1.25%

Institutional & Insider Ownership

75.3% of Fairmount Santrol shares are owned by institutional investors. Comparatively, 84.9% of Flotek Industries shares are owned by institutional investors. 9.8% of Fairmount Santrol shares are owned by insiders. Comparatively, 5.5% of Flotek Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Fairmount Santrol beats Flotek Industries on 11 of the 14 factors compared between the two stocks.

About Fairmount Santrol

Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.

About Flotek Industries

Flotek Industries, Inc. is a technology-driven company. The Company develops and supplies chemistry and services to the oil and gas industries, and compounds to companies that make cleaning products, cosmetics, food and beverages, and other products that are sold in consumer and industrial markets. The Company operates through two segments: Energy Chemistry Technologies (ECT), and Consumer and Industrial Chemistry Technologies (CICT). The ECT segment designs, develops, manufactures, packages and markets chemistries for use in oil and gas well drilling, cementing, completion and stimulation activities. Its ECT segment’s services include Reservoir Characterization, Polymer Conformance and Logistics Management. The CICT segment sources citrus oil domestically and internationally, and processor of citrus oils in the world. The CICT segment designs, develops and manufactures products that are sold to companies in the flavor and fragrance industries and specialty chemical industry.

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