Smart Sand (NASDAQ:SND) versus Cactus (NYSE:WHD) Critical Survey

Cactus (NYSE:WHD) and Smart Sand (NASDAQ:SND) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

85.1% of Cactus shares are held by institutional investors. Comparatively, 35.2% of Smart Sand shares are held by institutional investors. 12.9% of Cactus shares are held by insiders. Comparatively, 33.5% of Smart Sand shares are held by 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cactus	6.69%	17.93%	11.01%
Smart Sand	2.71%	4.41%	3.07%

Analyst Ratings

This is a summary of recent recommendations for Cactus and Smart Sand, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	0	3	3	0	2.50
Smart Sand	0	0	1	0	3.00

Cactus currently has a consensus price target of $73.25, indicating a potential upside of 11.36%. Given Cactus’ higher probable upside, equities analysts plainly believe Cactus is more favorable than Smart Sand.

Volatility & Risk

Cactus has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, Smart Sand has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Valuation and Earnings

This table compares Cactus and Smart Sand”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.08 billion	4.89	$166.01 million	$1.44	45.68
Smart Sand	$330.15 million	0.62	$1.35 million	$0.26	18.62

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

Summary

Cactus beats Smart Sand on 12 of the 14 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

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.