Financial Comparison: Archrock (AROC) & McDermott International (MDR)
Archrock (NYSE: AROC) and McDermott International (NYSE:MDR) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.
This table compares Archrock and McDermott International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Archrock has a beta of 3.2, meaning that its share price is 220% more volatile than the S&P 500. Comparatively, McDermott International has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Archrock and McDermott International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Archrock presently has a consensus target price of $13.13, suggesting a potential upside of 44.23%. McDermott International has a consensus target price of $7.89, suggesting a potential upside of 3.10%. Given Archrock’s higher probable upside, equities research analysts plainly believe Archrock is more favorable than McDermott International.
Archrock pays an annual dividend of $0.48 per share and has a dividend yield of 5.3%. McDermott International does not pay a dividend. Archrock pays out -49.0% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Archrock and McDermott International’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Archrock||$807.07 million||0.87||-$54.55 million||($0.98)||-9.29|
|McDermott International||$2.64 billion||0.82||$34.11 million||$0.54||14.17|
McDermott International has higher revenue and earnings than Archrock. Archrock is trading at a lower price-to-earnings ratio than McDermott International, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
83.8% of Archrock shares are owned by institutional investors. Comparatively, 85.2% of McDermott International shares are owned by institutional investors. 2.5% of Archrock shares are owned by company insiders. Comparatively, 1.3% of McDermott International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
McDermott International beats Archrock on 9 of the 15 factors compared between the two stocks.
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.
About McDermott International
McDermott International, Inc. is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects. It operates through three segments: the Americas, Europe and Africa (AEA), the Middle East (MEA) and Asia (ASA). As of December 31, 2016, operated in approximately 20 countries across the Americas, Europe, Africa, the Middle East, Asia and Australia, its integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. It support its activities with project management and procurement services, while utilizing its fully integrated capabilities in both shallow water and deepwater construction.
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