Ferrellgas Partners, L.P. (NYSE: FGP) and Archrock Partners, L.P. (NASDAQ:APLP) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.
Ferrellgas Partners, L.P. pays an annual dividend of $0.40 per share and has a dividend yield of 8.0%. Archrock Partners, L.P. pays an annual dividend of $1.14 per share and has a dividend yield of 8.1%. Ferrellgas Partners, L.P. pays out -72.7% of its earnings in the form of a dividend. Archrock Partners, L.P. pays out -518.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Archrock Partners, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Ferrellgas Partners, L.P. and Archrock Partners, L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ferrellgas Partners, L.P.||-2.83%||N/A||-3.26%|
|Archrock Partners, L.P.||-2.49%||6.02%||1.57%|
This is a breakdown of current ratings and recommmendations for Ferrellgas Partners, L.P. and Archrock Partners, L.P., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ferrellgas Partners, L.P.||1||3||1||0||2.00|
|Archrock Partners, L.P.||0||2||1||0||2.33|
Ferrellgas Partners, L.P. presently has a consensus price target of $9.59, indicating a potential upside of 92.13%. Archrock Partners, L.P. has a consensus price target of $18.50, indicating a potential upside of 31.02%. Given Ferrellgas Partners, L.P.’s higher probable upside, analysts plainly believe Ferrellgas Partners, L.P. is more favorable than Archrock Partners, L.P..
Institutional & Insider Ownership
6.9% of Ferrellgas Partners, L.P. shares are held by institutional investors. Comparatively, 41.2% of Archrock Partners, L.P. shares are held by institutional investors. 0.5% of Ferrellgas Partners, L.P. shares are held by insiders. Comparatively, 0.4% of Archrock Partners, L.P. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Ferrellgas Partners, L.P. and Archrock Partners, L.P.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ferrellgas Partners, L.P.||$1.93 billion||0.25||$213.18 million||($0.55)||-9.07|
|Archrock Partners, L.P.||$546.43 million||1.69||$236.11 million||($0.22)||-64.18|
Archrock Partners, L.P. has higher revenue, but lower earnings than Ferrellgas Partners, L.P.. Archrock Partners, L.P. is trading at a lower price-to-earnings ratio than Ferrellgas Partners, L.P., indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Ferrellgas Partners, L.P. has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Archrock Partners, L.P. has a beta of 2.24, meaning that its stock price is 124% more volatile than the S&P 500.
Archrock Partners, L.P. beats Ferrellgas Partners, L.P. on 11 of the 14 factors compared between the two stocks.
Ferrellgas Partners, L.P. Company Profile
Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company’s segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company’s two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.
Archrock Partners, L.P. Company Profile
Archrock Partners, L.P. is engaged in natural gas compression industry in the United States. The Company’s contract operations services include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining equipment to provide natural gas compression services to its customers. It provides contract operations services, including the personnel, equipment, tools, materials and supplies to meet its customers’ natural gas compression needs. Archrock General Partner, L.P., its general partner, is a subsidiary of Archrock and has responsibility for conducting its business and for managing its operations. The Company utilizes both slow and high speed reciprocating compressors primarily driven by internal natural gas fired combustion engines. Its customers include companies engaged in various aspects of the oil and natural gas industry, including natural gas producers, processors, gatherers, transporters and storage providers.
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