Fairmount Santrol (FMSA) vs. Antero Midstream GP (AMGP) Financial Review

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Antero Midstream GP (NYSE: AMGP) and Fairmount Santrol (NYSE:FMSA) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Valuation and Earnings

This table compares Antero Midstream GP and Fairmount Santrol’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Antero Midstream GP $69.72 million 41.87 $2.32 million $0.03 522.67
Fairmount Santrol $959.79 million 1.07 $53.78 million $0.24 19.00

Fairmount Santrol has higher revenue and earnings than Antero Midstream GP. Fairmount Santrol is trading at a lower price-to-earnings ratio than Antero Midstream GP, indicating that it is currently the more affordable of the two stocks.

Dividends

Antero Midstream GP pays an annual dividend of $0.30 per share and has a dividend yield of 1.9%. Fairmount Santrol does not pay a dividend. Antero Midstream GP pays out 1,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Antero Midstream GP and Fairmount Santrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Antero Midstream GP 4.58% 22.05% 11.93%
Fairmount Santrol 5.60% 20.31% 4.52%

Institutional & Insider Ownership

73.0% of Antero Midstream GP shares are held by institutional investors. Comparatively, 74.7% of Fairmount Santrol shares are held by institutional investors. 9.8% of Fairmount Santrol shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Antero Midstream GP and Fairmount Santrol, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Antero Midstream GP 0 4 12 1 2.82
Fairmount Santrol 1 10 10 0 2.43

Antero Midstream GP presently has a consensus price target of $25.71, indicating a potential upside of 63.94%. Fairmount Santrol has a consensus price target of $5.95, indicating a potential upside of 30.42%. Given Antero Midstream GP’s stronger consensus rating and higher possible upside, equities analysts plainly believe Antero Midstream GP is more favorable than Fairmount Santrol.

Summary

Antero Midstream GP beats Fairmount Santrol on 9 of the 16 factors compared between the two stocks.

Antero Midstream GP Company Profile

Antero Midstream GP LP, formerly Antero Resources Midstream Management LLC, owns, operates and develops midstream energy infrastructure. The Company’s segments include gathering and processing and water handling and treatment. The gathering and processing segment consist of long-term, fee-based activities including low-pressure gathering, compression, high-pressure gathering, processing, fractionation, and condensate gathering. The Company’s water handling and treatment segment consists of long-term fee based activities including fresh water delivery used in completion activity, and water handling services. The Company’s assets are located both in the southwestern core of the Marcellus Shale in northwest West Virginia and in the core of the Utica Shale in southern Ohio.

Fairmount Santrol Company Profile

Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.

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