Head-To-Head Contrast: RigNet (RNET) versus Select Energy Services (WTTR)

RigNet (NASDAQ: RNET) and Select Energy Services (NASDAQ:WTTR) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Profitability

This table compares RigNet and Select Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RigNet -5.69% -9.98% -4.94%
Select Energy Services -7.80% -11.02% -8.68%

Insider and Institutional Ownership

91.3% of RigNet shares are owned by institutional investors. 1.2% of RigNet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for RigNet and Select Energy Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RigNet 0 2 1 0 2.33
Select Energy Services 1 1 5 0 2.57

RigNet presently has a consensus price target of $19.33, indicating a potential upside of 9.23%. Select Energy Services has a consensus price target of $18.86, indicating a potential upside of 25.88%. Given Select Energy Services’ stronger consensus rating and higher probable upside, analysts clearly believe Select Energy Services is more favorable than RigNet.

Valuation and Earnings

This table compares RigNet and Select Energy Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RigNet $200.61 million 1.61 $22.97 million ($0.65) -27.23
Select Energy Services $395.02 million 1.15 $45.45 million N/A N/A

Select Energy Services has higher revenue and earnings than RigNet.

Summary

RigNet beats Select Energy Services on 6 of the 11 factors compared between the two stocks.

RigNet Company Profile

RigNet, Inc. (RigNet) provides customized systems and solutions serving customers with data networking and operational requirements. The Company provides voice and data network, video conferencing and monitoring, crew welfare, asset and weather monitoring, and real-time data services. It operates through two segments: Managed Services, and Systems Integration and Automation (SI&A). The Managed Services segment provides remote communications services for offshore and onshore drilling rigs and production facilities, as well as, support vessels and other remote sites. The SI&A segment provides customized solutions for customer telecommunications systems. As of December 31, 2016, the Company provided remote communications and collaborative services to approximately 500 customers reaching approximately 900 remote sites located in approximately 50 countries on six continents. It provides managed remote communications, engineered telecommunications solutions and applications.

Select Energy Services Company Profile

Select Energy Services, Inc. is a holding company. The Company is provider of total water solutions to the United States unconventional oil and gas industry. The Company is engaged in sourcing and transfer of water prior to its use in drilling and completion activities associated with hydraulic fracturing or fracking, which collectively referrd to as pre-frac water services. The Company provides its services to integrated and exploration and production (E&P) companies. Its operating segments include water solutions, accommodation and rentals, and wellsite completion and constructive services. The Company’s services include water sourcing, water transfer, water treatment, fluid handling, disposal solutions, accommodations, rentals, and wellsite construction. The Company also provides complementary water-related services that support oil and gas well completion and production activities including containment, monitoring, treatment, flowback, hauling and disposal.

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