Financial Analysis: NCS Multistage (NCSM) vs. Fairmount Santrol (FMSA)

NCS Multistage (NASDAQ: NCSM) and Fairmount Santrol (NYSE:FMSA) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Profitability

This table compares NCS Multistage and Fairmount Santrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NCS Multistage 2.42% 2.22% 1.56%
Fairmount Santrol 1.69% 4.05% 0.86%

Analyst Ratings

This is a summary of recent ratings and recommmendations for NCS Multistage and Fairmount Santrol, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NCS Multistage 0 1 7 0 2.88
Fairmount Santrol 1 10 10 0 2.43

NCS Multistage currently has a consensus price target of $25.33, suggesting a potential upside of 76.79%. Fairmount Santrol has a consensus price target of $5.95, suggesting a potential upside of 23.64%. Given NCS Multistage’s stronger consensus rating and higher probable upside, analysts clearly believe NCS Multistage is more favorable than Fairmount Santrol.

Earnings and Valuation

This table compares NCS Multistage 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
NCS Multistage $98.47 million 6.39 -$17.92 million N/A N/A
Fairmount Santrol $535.01 million 2.01 -$140.19 million $0.06 80.17

NCS Multistage has higher earnings, but lower revenue than Fairmount Santrol.

Insider and Institutional Ownership

94.0% of NCS Multistage shares are held by institutional investors. Comparatively, 73.2% of Fairmount Santrol shares are held by institutional investors. 9.8% of Fairmount Santrol shares are held by company 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.

Summary

NCS Multistage beats Fairmount Santrol on 7 of the 11 factors compared between the two stocks.

About NCS Multistage

NCS Multistage Holdings, Inc. is a provider of engineered products and support services for oil and natural gas well completions and field development strategies. The Company’s products and services include Multistage Unlimited, casing-installed sliding sleeves, downhole frac isolation assembly, AirLock casing buoyancy system and liner hanger systems. The Company provides products and services primarily to exploration and production (E&P) companies for use in onshore wells, predominantly wells that have been drilled with horizontal laterals in unconventional oil and natural gas formations. The Company’s products and services are utilized in oil and natural gas basins throughout North America and in selected international markets, including Argentina, China and Russia.

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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