Reviewing Kodiak Gas Services (NYSE:KGS) and Noble (NYSE:NE)

Kodiak Gas Services (NYSE:KGS) and Noble (NYSE:NE) are both mid-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Volatility and Risk

Kodiak Gas Services has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Noble has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Kodiak Gas Services and Noble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kodiak Gas Services	5.77%	11.92%	3.70%
Noble	4.88%	1.93%	1.18%

Valuation and Earnings

This table compares Kodiak Gas Services and Noble”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kodiak Gas Services	$1.31 billion	4.54	$80.52 million	$0.84	69.98
Noble	$3.29 billion	2.15	$216.72 million	$0.93	47.58

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

Dividends

Kodiak Gas Services pays an annual dividend of $1.96 per share and has a dividend yield of 3.3%. Noble pays an annual dividend of $2.00 per share and has a dividend yield of 4.5%. Kodiak Gas Services pays out 233.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Noble pays out 215.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kodiak Gas Services has increased its dividend for 2 consecutive years. Noble is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Kodiak Gas Services and Noble, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kodiak Gas Services	0	2	10	0	2.83
Noble	1	5	2	1	2.33

Kodiak Gas Services presently has a consensus target price of $78.89, suggesting a potential upside of 34.20%. Noble has a consensus target price of $44.71, suggesting a potential upside of 1.06%. Given Kodiak Gas Services’ stronger consensus rating and higher possible upside, analysts plainly believe Kodiak Gas Services is more favorable than Noble.

Institutional & Insider Ownership

24.9% of Kodiak Gas Services shares are owned by institutional investors. Comparatively, 68.1% of Noble shares are owned by institutional investors. 0.6% of Kodiak Gas Services shares are owned by company insiders. Comparatively, 1.5% of Noble shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Kodiak Gas Services beats Noble on 10 of the 18 factors compared between the two stocks.

About Kodiak Gas Services

Kodiak Gas Services, Inc. operates contract compression infrastructure for customers in the oil and gas industry in the United States. It operates in two segments, Compression Operations and Other Services. The Compression Operations segment operates company-owned and customer-owned compression infrastructure to enable the production, gathering, and transportation of natural gas and oil. The Other Services segment provides a range of contract services, including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. The company was formerly known as Frontier TopCo, Inc. Kodiak Gas Services, Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.

About Noble

Noble Corp. Plc engages in the provision offshore drilling services for oil and gas industry. It focuses on a balanced fleet of floating and jackup rigs and the deployment of drilling rigs in oil and gas basins around the world. The company was founded by Lloyd Noble and Art Olson in 1921 and is headquartered in London, the United Kingdom.