Critical Analysis: Superior Energy Services (SPN) vs. RPC (RES)

Superior Energy Services (NYSE: SPN) and RPC (NYSE:RES) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

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This table compares Superior Energy Services and RPC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Superior Energy Services -10.99% -21.92% -7.80%
RPC 10.19% 16.90% 13.10%

Earnings & Valuation

This table compares Superior Energy Services and RPC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Superior Energy Services $1.87 billion 0.77 -$205.92 million ($1.65) -5.66
RPC $1.60 billion 2.47 $162.51 million $0.66 27.53

RPC has lower revenue, but higher earnings than Superior Energy Services. Superior Energy Services is trading at a lower price-to-earnings ratio than RPC, indicating that it is currently the more affordable of the two stocks.

Dividends

RPC pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Superior Energy Services does not pay a dividend. RPC pays out 60.6% of its earnings in the form of a dividend. RPC has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

35.3% of RPC shares are held by institutional investors. 2.9% of Superior Energy Services shares are held by company insiders. Comparatively, 73.5% of RPC shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Superior Energy Services and RPC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Superior Energy Services 0 15 9 0 2.38
RPC 1 13 4 0 2.17

Superior Energy Services currently has a consensus target price of $12.86, indicating a potential upside of 37.64%. RPC has a consensus target price of $23.16, indicating a potential upside of 27.44%. Given Superior Energy Services’ stronger consensus rating and higher possible upside, research analysts plainly believe Superior Energy Services is more favorable than RPC.

Risk and Volatility

Superior Energy Services has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, RPC has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Summary

RPC beats Superior Energy Services on 11 of the 17 factors compared between the two stocks.

Superior Energy Services Company Profile

Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

RPC Company Profile

RPC, Inc. (RPC) is a holding company for several oilfield services companies. The Company provides a range of specialized oilfield services and equipment primarily to independent oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. The Company’s segments are Technical Services and Support Services. The Technical Services segment consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. Its Support Services include all of the services that provide equipment for customers’ use on the well site without RPC personnel and services that are provided in support of customer operations off the well site, such as classroom and computer training, and other consulting services.

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