Analyzing Select Egy Svcs (WTTR) and RigNet (RNET)

Select Egy Svcs (NYSE: WTTR) and RigNet (NASDAQ:RNET) are both small-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Valuation & Earnings

This table compares Select Egy Svcs and RigNet’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Select Egy Svcs $302.39 million 5.32 -$307.52 million $4.00 3.78
RigNet $220.62 million 1.29 -$11.50 million ($0.79) -19.75

RigNet has higher revenue, but lower earnings than Select Egy Svcs. RigNet is trading at a lower price-to-earnings ratio than Select Egy Svcs, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Select Egy Svcs and RigNet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Select Egy Svcs -6.18% -6.04% -4.91%
RigNet -7.05% -11.13% -5.49%

Insider and Institutional Ownership

29.5% of Select Egy Svcs shares are owned by institutional investors. Comparatively, 93.6% of RigNet shares are owned by institutional investors. 1.2% of RigNet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Select Egy Svcs and RigNet, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Egy Svcs 1 1 6 0 2.63
RigNet 0 2 1 0 2.33

Select Egy Svcs currently has a consensus price target of $19.00, indicating a potential upside of 25.58%. RigNet has a consensus price target of $19.33, indicating a potential upside of 23.93%. Given Select Egy Svcs’ stronger consensus rating and higher possible upside, analysts clearly believe Select Egy Svcs is more favorable than RigNet.

Summary

Select Egy Svcs beats RigNet on 9 of the 12 factors compared between the two stocks.

Select Egy Svcs Company Profile

Select Energy Services, Inc. is a holding company. The Company is provider of total water solutions to the United States unconventional oil and gas industry. The Company is engaged in sourcing and transfer of water prior to its use in drilling and completion activities associated with hydraulic fracturing or fracking, which collectively referrd to as pre-frac water services. The Company provides its services to integrated and exploration and production (E&P) companies. Its operating segments include water solutions, accommodation and rentals, and wellsite completion and constructive services. The Company’s services include water sourcing, water transfer, water treatment, fluid handling, disposal solutions, accommodations, rentals, and wellsite construction. The Company also provides complementary water-related services that support oil and gas well completion and production activities including containment, monitoring, treatment, flowback, hauling and disposal.

RigNet Company Profile

RigNet, Inc. (RigNet) provides customized systems and solutions serving customers with data networking and operational requirements. The Company provides voice and data network, video conferencing and monitoring, crew welfare, asset and weather monitoring, and real-time data services. It operates through two segments: Managed Services, and Systems Integration and Automation (SI&A). The Managed Services segment provides remote communications services for offshore and onshore drilling rigs and production facilities, as well as, support vessels and other remote sites. The SI&A segment provides customized solutions for customer telecommunications systems. As of December 31, 2016, the Company provided remote communications and collaborative services to approximately 500 customers reaching approximately 900 remote sites located in approximately 50 countries on six continents. It provides managed remote communications, engineered telecommunications solutions and applications.

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