Financial Review: Archrock (NYSE:AROC) vs. KLX Energy Services (NASDAQ:KLXE)

KLX Energy Services (NASDAQ:KLXE) and Archrock (NYSE:AROC) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Risk and Volatility

KLX Energy Services has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Archrock has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Valuation & Earnings

This table compares KLX Energy Services and Archrock”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KLX Energy Services	$709.30 million	0.07	-$53.00 million	($4.30)	-0.65
Archrock	$1.16 billion	4.48	$172.23 million	$1.50	19.73

Archrock has higher revenue and earnings than KLX Energy Services. KLX Energy Services is trading at a lower price-to-earnings ratio than Archrock, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

42.7% of KLX Energy Services shares are owned by institutional investors. Comparatively, 95.5% of Archrock shares are owned by institutional investors. 5.3% of KLX Energy Services shares are owned by company insiders. Comparatively, 2.6% of Archrock shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
KLX Energy Services	-11.90%	N/A	-16.89%
Archrock	18.43%	20.17%	6.68%

Analyst Ratings

This is a summary of current recommendations for KLX Energy Services and Archrock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLX Energy Services	1	1	0	0	1.50
Archrock	0	2	6	0	2.75

Archrock has a consensus target price of $32.40, suggesting a potential upside of 9.46%. Given Archrock’s stronger consensus rating and higher possible upside, analysts plainly believe Archrock is more favorable than KLX Energy Services.

Summary

Archrock beats KLX Energy Services on 13 of the 14 factors compared between the two stocks.

About KLX Energy Services

KLX Energy Services Holdings, Inc. provides drilling, completions, production, and well intervention services and products to the onshore oil and gas producing regions of the United States. The company operates through three segments: Southwest, Rocky Mountains, and Northeast/Mid-Con. It provides directional drilling services; downhole navigational and rental tools businesses and support services, including well planning, site supervision, accommodation rentals, and other drilling rentals; and various technologies, including gamma ray, azimuthal gamma ray, real-time continuous inclination and azimuth, rotary steerable, pressure-while-drilling, mode shifting, stick-slip and destructive dynamics, dynamic sequencing and real-time shock, and vibration modules. The company also offers coiled tubing and nitrogen services; wireline services, including pump down perforating, logging, and pipe recover; pressure control products and services; wellhead and hydraulic fracturing rental products and services; flowback and testing services; thru-tubing technologies and services; rig assist snubbing services; cementing products and services; acidizing and pressure pumping services; and downhole completion tools, such as toe sleeves, wet shoe cementing bypass subs, composite plugs, dissolvable plugs, liner hangers, stage cementing tools, inflatables, float and casing equipment, and retrievable completion tools. In addition, it provides production services comprising maintenance-related intervention services; production blow out preventers; mechanical wireline services; slick line services; hydro-testing services; premium tubulars; and other specialized production tools. Further, the company provides intervention services consisting of technicians and equipment that are focused on providing customers engineered solutions to downhole complications. KLX Energy Services Holdings, Inc. was incorporated in 2018 and is headquartered in Houston, Texas.

About Archrock

Archrock, Inc., together with its subsidiaries, operates as an energy infrastructure company in the United States. The company operates in two segments, Contract Operations and Aftermarket Services. It engages in the designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining of its owned fleet of natural gas compression equipment to provide natural gas compression services. The company also sells over-the-counter parts and components; and provides operations, major and routine maintenance, overhaul, and reconfiguration services to customers who own compression equipment. It serves integrated and independent oil and natural gas processors, gatherers, and transporters. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.