Head-To-Head Review: Flotek Industries (NYSE:FTK) versus Nine Energy Service (NYSE:NINE)

Nine Energy Service (NYSE:NINE) and Flotek Industries (NYSE:FTK) are both small-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

57.6% of Nine Energy Service shares are owned by institutional investors. Comparatively, 10.9% of Flotek Industries shares are owned by institutional investors. 4.1% of Nine Energy Service shares are owned by company insiders. Comparatively, 3.0% of Flotek Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Nine Energy Service has a beta of 2.83, indicating that its stock price is 183% more volatile than the S&P 500. Comparatively, Flotek Industries has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Nine Energy Service and Flotek Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nine Energy Service	1	0	0	0	1.00
Flotek Industries	0	1	2	1	3.00

Flotek Industries has a consensus target price of $17.50, indicating a potential upside of 17.81%. Given Flotek Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Flotek Industries is more favorable than Nine Energy Service.

Profitability

This table compares Nine Energy Service and Flotek Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nine Energy Service	-6.31%	N/A	-10.17%
Flotek Industries	6.59%	17.67%	10.86%

Valuation and Earnings

This table compares Nine Energy Service and Flotek Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nine Energy Service	$571.17 million	0.03	-$41.08 million	($1.00)	-0.45
Flotek Industries	$220.50 million	2.02	$10.50 million	$0.89	16.69

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

Summary

Flotek Industries beats Nine Energy Service on 11 of the 15 factors compared between the two stocks.

About Nine Energy Service

Nine Energy Service, Inc. operates as an onshore completion services provider that targets unconventional oil and gas resource development in North American basins and internationally. It offers cementing services, including blending high-grade cement and water with various solid and liquid additives to create a cement slurry that is pumped between the casing and the wellbore of the well. The company also provides open hole and cemented completion tool products, such as liner hangers and accessories, fracture isolation packers, frac sleeves, stage one prep tools, casing flotation tools, specialty open hole float equipment, disk subs, composite cement retainers, and centralizers that provide pinpoint frac sleeve system technologies. In addition, it offers wireline services consisting of plug-and-perf completions, which is a multistage well completion technique for cased-hole wells that consists of deploying perforating guns and isolation tools to a specified depth; and coiled tubing services, which perform wellbore intervention operations utilizing a continuous steel pipe that is transported to the wellsite wound on a large spool. The company was formerly known as NSC-Tripoint, Inc. and changed its name to Nine Energy Service, Inc. in October 2011. Nine Energy Service, Inc. was incorporated in 2011 and is headquartered in Houston, Texas.

About Flotek Industries

Flotek Industries, Inc. operates as a technology-driven green chemistry and data company that serves customers across industrial and commercial markets in the United States, the United Arab Emirates, and internationally. It operates through two segments: Chemistry Technologies (CT) and Data Analytics (DA). The CT segment designs, develops, manufactures, packages, distributes, delivers, and markets green specialty chemicals that enhance the profitability of hydrocarbon producers, as well as green specialty chemistries, and logistics and technology services. This segment primarily serves integrated oil and gas, oilfield services, independent oil and gas, national and state-owned oil, geothermal energy, solar energy, and alternative energy companies. The DA segment designs, develops, produces, sells, and supports equipment and services that create and provide valuable information on the composition and properties of energy customers' hydrocarbon fluids. It sells its products directly through a mix of in-house sales professionals, as well as contractual agency agreements. Flotek Industries, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.