Reviewing Newpark Resources (NR) and Eco-Stim Energy Solutions (ESES)

Newpark Resources (NYSE: NR) and Eco-Stim Energy Solutions (NASDAQ:ESES) are both small-cap oil related services and equipment – nec companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Newpark Resources and Eco-Stim Energy Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Newpark Resources 0 1 4 0 2.80
Eco-Stim Energy Solutions 0 1 3 0 2.75

Newpark Resources currently has a consensus target price of $9.50, indicating a potential upside of 6.15%. Eco-Stim Energy Solutions has a consensus target price of $2.45, indicating a potential upside of 76.26%. Given Eco-Stim Energy Solutions’ higher probable upside, analysts clearly believe Eco-Stim Energy Solutions is more favorable than Newpark Resources.

Volatility & Risk

Newpark Resources has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, Eco-Stim Energy Solutions has a beta of 2.14, suggesting that its stock price is 114% more volatile than the S&P 500.

Institutional and Insider Ownership

50.7% of Eco-Stim Energy Solutions shares are owned by institutional investors. 4.9% of Newpark Resources shares are owned by company insiders. Comparatively, 11.1% of Eco-Stim Energy Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Newpark Resources and Eco-Stim Energy Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Newpark Resources 0.48% -0.29% -0.17%
Eco-Stim Energy Solutions -85.29% -68.94% -29.17%

Earnings and Valuation

This table compares Newpark Resources and Eco-Stim Energy Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Newpark Resources $471.50 million 1.63 -$40.71 million $0.04 223.75
Eco-Stim Energy Solutions $8.35 million 12.41 -$17.92 million ($1.09) -1.28

Eco-Stim Energy Solutions has higher revenue, but lower earnings than Newpark Resources. Eco-Stim Energy Solutions is trading at a lower price-to-earnings ratio than Newpark Resources, indicating that it is currently the more affordable of the two stocks.

Summary

Newpark Resources beats Eco-Stim Energy Solutions on 7 of the 13 factors compared between the two stocks.

About Newpark Resources

Newpark Resources, Inc. is a supplier providing products and services primarily to the oil and gas exploration and production (E&P) industry. The Company’s segments include Fluids Systems, and Mats and Integrated Services. The Fluids Systems segment provides drilling fluids products and technical services to customers in the North America; Europe, the Middle East and Africa; Latin America, and Asia Pacific regions. The Mats and Integrated Services segment provides composite mat rentals, as well as location construction and related site services, to customers at well, production, transportation and refinery locations in the United States. It manufactures and sells composite mats to customers outside of the United States, and to domestic customers outside of the oil and gas exploration market. The Fluids Systems segment offers customized solutions for technical drilling projects involving subsurface conditions, such as horizontal, directional, geologically deep or deep water drilling.

About Eco-Stim Energy Solutions

Eco-Stim Energy Solutions, Inc. is an oilfield services company. The Company provides well stimulation, coiled tubing and field management services to the upstream oil and gas industry. The Company focuses on the active shale and unconventional oil and natural gas basins outside the United States and it has commenced operations in Argentina. The Company operates well stimulation fleets, coiled tubing units and other downhole completion equipment, as well as provides sweet spot analysis in shale resource basins using geophysical predictive modeling combined with real-time feedback from down-hole diagnostic tools. The Company offers a pumping fleet, including well-stimulation pumps, nitrogen pumping units and cranes, in both trailer-mounted and skid-mounted configurations. It provides a range of pressure-pumping services, including work-over pumping, well injection and wireline pump downs.

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