Financial Comparison: Natural Gas Services Group (NGS) and Compressco Partners (CCLP)

Natural Gas Services Group (NYSE: NGS) and Compressco Partners (NASDAQ:CCLP) are both small-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Volatility & Risk

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Natural Gas Services Group has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Compressco Partners has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Earnings & Valuation

This table compares Natural Gas Services Group and Compressco Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Natural Gas Services Group $67.69 million 4.95 $19.85 million $0.11 235.45
Compressco Partners $295.57 million 0.95 -$40.45 million ($1.17) -6.38

Natural Gas Services Group has higher earnings, but lower revenue than Compressco Partners. Compressco Partners is trading at a lower price-to-earnings ratio than Natural Gas Services Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.9% of Natural Gas Services Group shares are held by institutional investors. Comparatively, 29.5% of Compressco Partners shares are held by institutional investors. 6.5% of Natural Gas Services Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Natural Gas Services Group and Compressco Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natural Gas Services Group 29.31% 0.62% 0.51%
Compressco Partners -13.69% -38.50% -5.58%

Dividends

Compressco Partners pays an annual dividend of $0.75 per share and has a dividend yield of 10.1%. Natural Gas Services Group does not pay a dividend. Compressco Partners pays out -64.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for Natural Gas Services Group and Compressco Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natural Gas Services Group 0 0 3 0 3.00
Compressco Partners 1 3 0 0 1.75

Natural Gas Services Group currently has a consensus target price of $28.00, indicating a potential upside of 8.11%. Compressco Partners has a consensus target price of $6.33, indicating a potential downside of 15.10%. Given Natural Gas Services Group’s stronger consensus rating and higher probable upside, research analysts plainly believe Natural Gas Services Group is more favorable than Compressco Partners.

Summary

Natural Gas Services Group beats Compressco Partners on 11 of the 15 factors compared between the two stocks.

About Natural Gas Services Group

Natural Gas Services Group, Inc. is a provider of small to medium horsepower compression equipment to the natural gas industry. The Company focuses primarily on the non-conventional natural gas and oil production business in the United States, such as coal bed methane, gas shale, tight gas and oil shales. The Company manufactures, fabricates and rents natural gases compressors that enhance the production of natural gas wells and provides maintenance services for its natural gas compressors. In addition, it sells custom fabricated natural gas compressors to meet customer specifications dictated by well pressures, production characteristics and particular applications. It also manufactures and sells flare systems for oil and gas plant and production facilities. The Company’s operating units include Gas Compressor Rental, Engineered Equipment Sales, Service and Maintenance, and Corporate.

About Compressco Partners

CSI Compressco LP provides compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage applications in the United States and internationally. It fabricates and sells standard and custom-designed compressor packages, oilfield fluid pump systems, and compressor package parts and components, as well as provides aftermarket services, such as operations, maintenance, overhaul, and reconfiguration services. The company offers GasJack and VJack electric powered low-horsepower compressor packages to provide production enhancement services. It also provides medium-horsepower compressor packages to move natural gas from the wellhead through the field gathering system; and high-horsepower compressor packages that are primarily used in midstream applications. In addition, the company offers well monitoring and sand separation, as well as early production services. Further, it fabricates and sells natural gas compressor packages for various applications, including gas gathering, gas lift, carbon dioxide injection, wellhead compression, gas storage, refrigeration plant compression, gas processing, pressure maintenance, pipeline transmission, vapor recovery, pipeline station optimization, gas transmission, fuel gas boosters, and coal bed methane systems, as well as sells engine parts, compressor package parts, and other parts. CSI Compressco GP Inc. serves as the general partner of CSI Compressco LP. The company was formerly known as Compressco Partners, L.P. and changed its name to CSI Compressco LP in December 2014. CSI Compressco LP was founded in 2008 and is headquartered in The Woodlands, Texas.

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