RPC (NYSE:RES) versus Ranger Energy Services (NYSE:RNGR) Critical Contrast

Ranger Energy Services (NYSE:RNGR) and RPC (NYSE:RES) are both small-cap energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional & Insider Ownership

68.1% of Ranger Energy Services shares are held by institutional investors. Comparatively, 41.1% of RPC shares are held by institutional investors. 2.8% of Ranger Energy Services shares are held by insiders. Comparatively, 58.8% of RPC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Ranger Energy Services and RPC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ranger Energy Services	2.36%	4.87%	3.33%
RPC	-1.77%	5.26%	3.97%

Risk and Volatility

Ranger Energy Services has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, RPC has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Ranger Energy Services and RPC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ranger Energy Services	0	2	1	0	2.33
RPC	3	2	1	0	1.67

Ranger Energy Services presently has a consensus price target of $20.00, suggesting a potential upside of 59.81%. RPC has a consensus price target of $5.67, suggesting a potential upside of 6.82%. Given Ranger Energy Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe Ranger Energy Services is more favorable than RPC.

Dividends

Ranger Energy Services pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. RPC pays an annual dividend of $0.16 per share and has a dividend yield of 3.0%. Ranger Energy Services pays out 40.0% of its earnings in the form of a dividend. RPC pays out -94.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ranger Energy Services has increased its dividend for 2 consecutive years. RPC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Ranger Energy Services and RPC”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ranger Energy Services	$546.90 million	0.54	$12.30 million	$0.60	20.86
RPC	$1.81 billion	0.65	$32.08 million	($0.17)	-31.21

RPC has higher revenue and earnings than Ranger Energy Services. RPC is trading at a lower price-to-earnings ratio than Ranger Energy Services, indicating that it is currently the more affordable of the two stocks.

Summary

RPC beats Ranger Energy Services on 9 of the 16 factors compared between the two stocks.

About Ranger Energy Services

Ranger Energy Services, Inc. provides onshore high specification well service rigs, wireline services, and complementary services to exploration and production companies in the United States. It operates through three segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The High Specification Rigs segment offers well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well; and well maintenance services. This segment also has a fleet of 402 well service rigs. The Wireline Services segment provides wireline production and intervention services to provide information to identify and resolve well production problems through cased hole logging, perforating, mechanical, and pipe recovery services; wireline completion services that are used primarily for pump down perforating operations to create perforations or entry holes through the production casing; and pumping services. This segment also has a fleet of 66 wireline units and 29 high-pressure pump trucks. The Processing Solutions and Ancillary Services segment rents well service-related equipment consisting of fluid pumps, power swivels, well control packages, hydraulic catwalks, frac tanks, pipe racks, and pipe handling tools; and coiled tubing, decommissioning, and snubbing services, as well as provides proprietary and modular equipment for the processing of natural gas streams. This segment also engages in the rental, installation, commissioning, start up, operation, and maintenance of mechanical refrigeration units, nitrogen gas liquid stabilizer units, nitrogen gas liquid storage units, and related equipment. Ranger Energy Services, Inc. was incorporated in 2017 and is headquartered in Houston, Texas.

About RPC

RPC, Inc., through its subsidiaries, engages provision of a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services segment offers pressure pumping, fracturing, acidizing, cementing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services, as well as well control training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Latin America, the Middle East, and internationally. The company was incorporated in 1984 and is headquartered in Atlanta, Georgia.