Archrock (AROC) vs. The Competition Critical Comparison

Archrock (NYSE:AROC) is one of 177 publicly-traded companies in the “Energy Equipment & Services” industry, but how does it compare to its rivals? We will compare Archrock to related businesses based on the strength of its profitability, valuation, analyst recommendations, dividends, earnings, risk and institutional ownership.

Profitability

This table compares Archrock and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Archrock	21.84%	22.22%	7.56%
Archrock Competitors	-11.25%	7.33%	1.42%

Volatility and Risk

Archrock has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Archrock’s rivals have a beta of 0.84, indicating that their average share price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Archrock and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archrock	1	0	9	0	2.80
Archrock Competitors	1666	6814	8605	486	2.45

Archrock currently has a consensus price target of $42.12, suggesting a potential upside of 33.34%. As a group, “Energy Equipment & Services” companies have a potential upside of 28.02%. Given Archrock’s stronger consensus rating and higher possible upside, analysts plainly believe Archrock is more favorable than its rivals.

Dividends

Archrock pays an annual dividend of $0.92 per share and has a dividend yield of 2.9%. Archrock pays out 49.5% of its earnings in the form of a dividend. As a group, “Energy Equipment & Services” companies pay a dividend yield of 2.9% and pay out 57.4% of their earnings in the form of a dividend. Archrock has increased its dividend for 3 consecutive years. Archrock is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

95.5% of Archrock shares are owned by institutional investors. Comparatively, 49.0% of shares of all “Energy Equipment & Services” companies are owned by institutional investors. 2.9% of Archrock shares are owned by insiders. Comparatively, 12.3% of shares of all “Energy Equipment & Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Archrock and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Archrock	$1.49 billion	$322.29 million	16.98
Archrock Competitors	$3.22 billion	$29.73 million	18.70

Archrock’s rivals have higher revenue, but lower earnings than Archrock. Archrock is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Archrock beats its rivals on 11 of the 15 factors compared.

About Archrock

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.