Reviewing USA Compression Partners (NYSE:USAC) and WBI (NYSE:WBI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
WBI	0.54%	0.85%	0.41%
USA Compression Partners	12.43%	179.77%	4.83%

Insider & Institutional Ownership

47.8% of USA Compression Partners shares are held by institutional investors. 50.6% of WBI shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

WBI pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 8.2%. WBI pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. USA Compression Partners pays out 198.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. USA Compression Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for WBI and USA Compression Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WBI	0	2	4	1	2.86
USA Compression Partners	0	5	0	1	2.33

WBI presently has a consensus target price of $36.71, indicating a potential upside of 23.12%. USA Compression Partners has a consensus target price of $29.50, indicating a potential upside of 15.74%. Given WBI’s stronger consensus rating and higher possible upside, research analysts clearly believe WBI is more favorable than USA Compression Partners.

Earnings and Valuation

This table compares WBI 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
WBI	$525.55 million	7.01	$11.89 million	$0.08	372.76
USA Compression Partners	$998.10 million	3.70	$111.32 million	$1.06	24.05

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

Summary

USA Compression Partners beats WBI on 9 of the 15 factors compared between the two stocks.

About WBI

WaterBridge Infrastructure LLC is an integrated, pure-play water infrastructure company. WaterBridge Infrastructure LLC is based in HOUSTON.

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.