Contrasting RPC (RES) & Emerge Energy Services (EMES)

RPC (NYSE: RES) and Emerge Energy Services (NYSE:EMES) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

RPC has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Emerge Energy Services has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Earnings and Valuation

This table compares RPC and Emerge Energy Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RPC $728.97 million 7.32 -$141.24 million $0.38 64.87
Emerge Energy Services $128.40 million 2.07 -$72.77 million ($1.19) -7.41

Emerge Energy Services has lower revenue, but higher earnings than RPC. Emerge Energy Services is trading at a lower price-to-earnings ratio than RPC, indicating that it is currently the more affordable of the two stocks.

Dividends

RPC pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. Emerge Energy Services does not pay a dividend. RPC pays out 73.7% of its earnings in the form of a dividend. Emerge Energy Services has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent ratings and recommmendations for RPC and Emerge Energy Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPC 1 14 5 0 2.20
Emerge Energy Services 0 5 4 0 2.44

RPC currently has a consensus price target of $25.09, indicating a potential upside of 1.80%. Emerge Energy Services has a consensus price target of $15.88, indicating a potential upside of 79.99%. Given Emerge Energy Services’ stronger consensus rating and higher probable upside, analysts clearly believe Emerge Energy Services is more favorable than RPC.

Profitability

This table compares RPC and Emerge Energy Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPC 6.03% 10.31% 7.95%
Emerge Energy Services -10.94% -69.67% -11.03%

Insider and Institutional Ownership

38.1% of RPC shares are owned by institutional investors. Comparatively, 23.3% of Emerge Energy Services shares are owned by institutional investors. 73.5% of RPC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

RPC beats Emerge Energy Services on 11 of the 17 factors compared between the two stocks.

About RPC

RPC, Inc. (RPC) is a holding company for several oilfield services companies. The Company provides a range of specialized oilfield services and equipment primarily to independent oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. The Company’s segments are Technical Services and Support Services. The Technical Services segment consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. Its Support Services include all of the services that provide equipment for customers’ use on the well site without RPC personnel and services that are provided in support of customer operations off the well site, such as classroom and computer training, and other consulting services.

About Emerge Energy Services

Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company operates through Sand segment. The Company conducts its Sand operations through its subsidiary, Superior Silica Sands LLC (SSS). The Company’s Sand business mines, processes and distributes silica sand, an input for the hydraulic fracturing of oil and gas wells. As of December 31, 2016, its Wisconsin facilities consisted of three dry plants located in Arland, Barron and New Auburn, Wisconsin, with a total permitted capacity of 6.3 million finished tons per year, and five wet plants and mine complexes. As of December 31, 2016, its dry plant in Kosse, Texas, had a capacity of 600,000 tons per year that is supplied by a separate mine and wet plant that processes local Texas sand. As of December 31, 2016, the Company also had 14 transload facilities located throughout North America in the basins where it delivers its sand, as well as a fleet of 5,573 railcars.

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