Ferrellgas Partners (FGP) versus Franks International (FI) Critical Comparison

Franks International (NYSE: FI) and Ferrellgas Partners (NYSE:FGP) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Profitability

This table compares Franks International and Ferrellgas Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franks International -26.21% -9.25% -7.80%
Ferrellgas Partners -2.96% N/A -3.53%

Dividends

Franks International pays an annual dividend of $0.22 per share and has a dividend yield of 3.6%. Ferrellgas Partners pays an annual dividend of $0.40 per share and has a dividend yield of 9.9%. Franks International pays out -41.5% of its earnings in the form of a dividend. Ferrellgas Partners pays out -66.7% 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. Ferrellgas Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings for Franks International and Ferrellgas Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franks International 3 9 1 0 1.85
Ferrellgas Partners 2 2 0 0 1.50

Franks International presently has a consensus price target of $7.61, suggesting a potential upside of 24.57%. Ferrellgas Partners has a consensus price target of $5.00, suggesting a potential upside of 23.46%. Given Franks International’s stronger consensus rating and higher probable upside, equities analysts clearly believe Franks International is more favorable than Ferrellgas Partners.

Volatility & Risk

Franks International has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Ferrellgas Partners has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Valuation and Earnings

This table compares Franks International and Ferrellgas Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franks International $487.53 million 2.80 -$135.33 million ($0.53) -11.53
Ferrellgas Partners $1.93 billion 0.20 -$54.20 million ($0.60) -6.75

Ferrellgas Partners has higher revenue and earnings than Franks International. Franks International is trading at a lower price-to-earnings ratio than Ferrellgas Partners, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

31.2% of Franks International shares are held by institutional investors. Comparatively, 6.5% of Ferrellgas Partners shares are held by institutional investors. 77.9% of Franks International shares are held by insiders. Comparatively, 0.5% of Ferrellgas Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Franks International Company Profile

Frank’s International N.V. (FINV) is a provider of engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry. The Company operates through four business segments: International Services, U. S. Services, Tubular Sales and Blackhawk. As of December 31, 2016, the International Services segment provided tubular services in international offshore markets and in several onshore international regions in approximately 60 countries on six continents. The U.S. Services segment provides tubular services. The Blackhawk segment provides well construction and well intervention rental equipment, services and products, in addition to the cementing tool expertise, in the United States and Mexican Gulf of Mexico, onshore United States and other select international locations.

Ferrellgas Partners 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.

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