Analyzing Nine Energy Service (NYSE:NINE) & Smart Sand (NASDAQ:SND)

Smart Sand (NASDAQ:SND) and Nine Energy Service (NYSE:NINE) are both small-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Risk and Volatility

Smart Sand has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Nine Energy Service has a beta of 2.83, indicating that its stock price is 183% more volatile than the S&P 500.

Valuation & Earnings

This table compares Smart Sand and Nine Energy Service”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smart Sand	$311.37 million	0.41	$2.99 million	$0.09	32.72
Nine Energy Service	$571.17 million	0.04	-$41.08 million	($1.00)	-0.46

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

Institutional and Insider Ownership

35.2% of Smart Sand shares are held by institutional investors. Comparatively, 57.6% of Nine Energy Service shares are held by institutional investors. 34.0% of Smart Sand shares are held by insiders. Comparatively, 4.1% of Nine Energy Service shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Smart Sand and Nine Energy Service, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smart Sand	0	1	0	0	2.00
Nine Energy Service	1	0	0	0	1.00

Profitability

This table compares Smart Sand and Nine Energy Service’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smart Sand	1.16%	-7.55%	-5.25%
Nine Energy Service	-6.31%	N/A	-10.17%

Summary

Smart Sand beats Nine Energy Service on 8 of the 12 factors compared between the two stocks.

About Smart Sand

Smart Sand, Inc., an integrated frac and industrial sand supply and services company, engages in the excavation, processing, and sale of sands or proppant for use in hydraulic fracturing operations in the oil and gas industry in the United States. It also provides proppant logistics services; and wellsite storage solutions through SmartSystems products and services. The company sells its products primarily to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. Smart Sand, Inc. was incorporated in 2011 and is headquartered in Spring, Texas.

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.