Head to Head Analysis: Key Energy Services (KEG) vs. RPC (RES)

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Key Energy Services (NYSE:KEG) and RPC (NYSE:RES) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

49.2% of Key Energy Services shares are owned by institutional investors. Comparatively, 32.3% of RPC shares are owned by institutional investors. 1.6% of Key Energy Services shares are owned by company insiders. Comparatively, 73.2% 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 is poised for long-term growth.

Volatility and Risk

Key Energy Services has a beta of 3.1, meaning that its share price is 210% more volatile than the S&P 500. Comparatively, RPC has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Valuation & Earnings

This table compares Key Energy Services and RPC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Key Energy Services $521.70 million 0.11 -$88.80 million ($4.53) -0.60
RPC $1.72 billion 1.14 $175.40 million $0.82 11.12

RPC has higher revenue and earnings than Key Energy Services. Key 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 $0.20 per share and has a dividend yield of 2.2%. Key Energy Services does not pay a dividend. RPC pays out 24.4% of its earnings in the form of a dividend. RPC has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Key Energy Services and RPC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Key Energy Services 0 3 1 0 2.25
RPC 8 9 1 0 1.61

Key Energy Services currently has a consensus price target of $5.08, indicating a potential upside of 85.52%. RPC has a consensus price target of $12.38, indicating a potential upside of 35.69%. Given Key Energy Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe Key Energy Services is more favorable than RPC.

Profitability

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

Net Margins Return on Equity Return on Assets
Key Energy Services -17.26% -383.21% -21.26%
RPC 7.57% 11.99% 9.32%

Summary

RPC beats Key Energy Services on 10 of the 15 factors compared between the two stocks.

Key Energy Services Company Profile

Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States. It operates through Rig Services, Fishing and Rental Services, Coiled Tubing Services, and Fluid Management Services segments. The Rig Services segment is involved in the completion of newly drilled wells; workover and recompletion of existing oil and natural gas wells; well maintenance activities; and plugging and abandonment of wells at the end of their useful lives, as well as provision of specialty drilling services to oil and natural gas producers. The Fishing and Rental Services segment provides fishing services that involve recovering lost or stuck equipment in the wellbore utilizing fishing tools; and rents drill pipes, tubulars, handling tools, pressure-control equipment, pumps, power swivels, reversing units, and foam air units. The Coiled Tubing Services segment offers services for wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations; mills temporary isolation plugs that separate frac zones; and other pre- and post-hydraulic fracturing well preparation services. The Fluid Management Services segment offers transportation and well-site storage services for fluids utilized in drilling, completions, workover, and maintenance activities; and disposal services for fluids produced subsequent to well completion. It also operates a fleet of hot oilers used to clear soluble restrictions in a wellbore. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is based in Houston, Texas.

RPC Company Profile

RPC, Inc., through its subsidiaries, provides a range of oilfield services and equipment for the oil and gas companies involved in the exploration, production, and development of oil and gas properties. The company operates through Technical Services and Support Services segments. The Technical Services offers pressure pumping, fracturing, acidizing, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, pump down, and fishing services that are used in the completion, production, and maintenance of oil and gas wells. The Support Services segment provides a range of rental tools, including blowout preventors, high pressure manifolds and valves, hevi-wate drill pipes, tubing products, production related rental tools, pumps, diverters, drill pipes, drill collars, handling tools, Coflexip hoses, and Wear Knot drill pipes that are used for onshore and offshore oil and gas well drilling, completion, and workover activities. This segment also offers oilfield pipe inspection, and pipe management and storage services; and oilfield training and consulting services. It operates in the United States, Africa, Canada, Argentina, China, Mexico, Eastern Europe, Latin America, the Middle East, and internationally. RPC, Inc. was founded in 1984 and is headquartered in Atlanta, Georgia.

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