Critical Review: Solaris Oilfield Infrastructure (SOI) & RPC (RES)

Solaris Oilfield Infrastructure (NYSE: SOI) and RPC (NYSE:RES) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Profitability

This table compares Solaris Oilfield Infrastructure and RPC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Solaris Oilfield Infrastructure 18.84% 10.16% 9.23%
RPC 6.03% 10.31% 7.95%

Dividends

RPC pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Solaris Oilfield Infrastructure does not pay a dividend. RPC pays out 73.7% of its earnings in the form of a dividend. RPC has increased its dividend for 5 consecutive years.

Institutional and Insider Ownership

56.4% of Solaris Oilfield Infrastructure shares are owned by institutional investors. Comparatively, 38.0% of RPC shares are owned by institutional investors. 73.5% of RPC shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Solaris Oilfield Infrastructure and RPC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Solaris Oilfield Infrastructure $18.15 million 49.12 $2.80 million $0.22 92.77
RPC $728.97 million 6.35 -$141.24 million $0.38 56.21

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

Analyst Ratings

This is a summary of recent ratings and price targets for Solaris Oilfield Infrastructure and RPC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Solaris Oilfield Infrastructure 0 1 12 0 2.92
RPC 1 14 5 0 2.20

Solaris Oilfield Infrastructure currently has a consensus target price of $19.50, suggesting a potential downside of 4.46%. RPC has a consensus target price of $24.74, suggesting a potential upside of 15.80%. Given RPC’s higher possible upside, analysts plainly believe RPC is more favorable than Solaris Oilfield Infrastructure.

Summary

Solaris Oilfield Infrastructure beats RPC on 9 of the 16 factors compared between the two stocks.

About Solaris Oilfield Infrastructure

Solaris Oilfield Infrastructure, Inc. manufactures and provides its mobile proppant management systems that unload, store and deliver proppant at oil and natural gas well sites. The Company offers its services to oil and natural gas exploration and production (E&P) companies, as well as oilfield service companies. Its mobile proppant system is designed to address the challenges associated with transferring large quantities of proppant to the well site, including the cost and management of last mile logistics. Its systems provide 2.5 million pounds of proppant storage capacity. The Company manufactures its systems at its facility in Early, Texas, The Company’s system provides Streamlined last mile logistics and Improved execution to meet completion designs. Its systems provide triple the storage capacity, such as trailer-mounted, hydraulically powered storage bins. Its integrated PropView system delivers real-time proppant inventory and consumption levels.

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.

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