USA Compression Partners (TXSE:USAC) versus Enerflex (NYSE:EFXT) Critical Survey

Enerflex (NYSE:EFXT) and USA Compression Partners (TXSE:USAC) are both mid-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Insider and Institutional Ownership

46.5% of Enerflex shares are owned by institutional investors. Comparatively, 47.8% of USA Compression Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Enerflex pays an annual dividend of $0.12 per share and has a dividend yield of 0.6%. USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 8.4%. Enerflex pays out 20.7% of its earnings in the form of a dividend. USA Compression Partners pays out 185.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enerflex has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Enerflex and USA Compression Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enerflex	0	3	5	1	2.78
USA Compression Partners	0	5	0	1	2.33

Enerflex presently has a consensus target price of $38.00, indicating a potential upside of 95.63%. USA Compression Partners has a consensus target price of $29.50, indicating a potential upside of 18.14%. Given Enerflex’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Enerflex is more favorable than USA Compression Partners.

Profitability

This table compares Enerflex and USA Compression Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enerflex	2.94%	13.15%	5.45%
USA Compression Partners	12.43%	179.77%	4.83%

Earnings and Valuation

This table compares Enerflex and USA Compression Partners”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enerflex	$2.57 billion	0.92	$64.00 million	$0.58	33.49
USA Compression Partners	$1.18 billion	3.08	$111.32 million	$1.13	22.10

USA Compression Partners has lower revenue, but higher earnings than Enerflex. USA Compression Partners is trading at a lower price-to-earnings ratio than Enerflex, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Enerflex has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500. Comparatively, USA Compression Partners has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Summary

Enerflex beats USA Compression Partners on 9 of the 16 factors compared between the two stocks.

About Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.

About USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.