Analyzing Fairmount Santrol (NYSE:FMSA) and Usa Compression Partners (USAC)

Usa Compression Partners (NYSE: USAC) and Fairmount Santrol (NYSE:FMSA) are both small-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Dividends

Usa Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 11.7%. Fairmount Santrol does not pay a dividend. Usa Compression Partners pays out 1,312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

73.5% of Fairmount Santrol shares are held by institutional investors. 9.8% of Fairmount Santrol shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Usa Compression Partners and Fairmount Santrol’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Usa Compression Partners $280.22 million 3.99 $12.93 million $0.16 112.50
Fairmount Santrol $535.01 million 2.09 -$140.19 million $0.06 83.33

Usa Compression Partners has higher earnings, but lower revenue than Fairmount Santrol. Fairmount Santrol is trading at a lower price-to-earnings ratio than Usa Compression Partners, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Usa Compression Partners has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Fairmount Santrol has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500.

Profitability

This table compares Usa Compression Partners and Fairmount Santrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Usa Compression Partners 4.08% 1.68% 0.78%
Fairmount Santrol 1.69% 4.05% 0.86%

Analyst Ratings

This is a summary of current ratings and recommmendations for Usa Compression Partners and Fairmount Santrol, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Usa Compression Partners 0 2 2 0 2.50
Fairmount Santrol 1 10 10 0 2.43

Usa Compression Partners presently has a consensus target price of $19.50, suggesting a potential upside of 8.33%. Fairmount Santrol has a consensus target price of $5.95, suggesting a potential upside of 18.94%. Given Fairmount Santrol’s higher probable upside, analysts plainly believe Fairmount Santrol is more favorable than Usa Compression Partners.

Summary

Fairmount Santrol beats Usa Compression Partners on 9 of the 16 factors compared between the two stocks.

About Usa Compression Partners

USA Compression Partners, LP is an independent provider of compression services in the United States. The Company provides compression services to its customers primarily in connection with infrastructure applications, including both allowing for the processing and transportation of natural gas through the domestic pipeline system and managing crude oil production through artificial lift processes. The Company engineers, designs, operates, services and repairs its compression units, and maintains related support inventory and equipment. It provides compression services in mature conventional basins, including gas lift applications on crude oil wells focused by horizontal drilling techniques. The Company provides compression services in various shale plays throughout the United States, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales.

About Fairmount Santrol

Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.

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