Ramaco Resources (NASDAQ:METC) and Select Energy Services (NYSE:WTTR) 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 dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.
Profitability
This table compares Ramaco Resources and Select Energy Services' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Ramaco Resources | 1.06% | 1.00% | 0.72% |
| Select Energy Services | -30.21% | 0.78% | 0.64% |
Valuation and Earnings
This table compares Ramaco Resources and Select Energy Services' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Ramaco Resources | $230.21 million | 0.88 | $24.93 million | $0.61 | 7.79 |
| Select Energy Services | $1.29 billion | 0.54 | $2.78 million | $0.17 | 39.88 |
Ramaco Resources has higher earnings, but lower revenue than Select Energy Services. Ramaco Resources is trading at a lower price-to-earnings ratio than Select Energy Services, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
67.7% of Ramaco Resources shares are held by institutional investors. Comparatively, 61.7% of Select Energy Services shares are held by institutional investors. 78.7% of Ramaco Resources shares are held by company insiders. Comparatively, 8.6% of Select Energy Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings for Ramaco Resources and Select Energy Services, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Ramaco Resources | 0 | 1 | 2 | 0 | 2.67 |
| Select Energy Services | 1 | 3 | 2 | 0 | 2.17 |
Ramaco Resources currently has a consensus target price of $6.3333, indicating a potential upside of 33.33%. Select Energy Services has a consensus target price of $5.5286, indicating a potential downside of 18.46%. Given Ramaco Resources' stronger consensus rating and higher possible upside, analysts clearly believe Ramaco Resources is more favorable than Select Energy Services.
Risk and Volatility
Ramaco Resources has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Select Energy Services has a beta of 2.88, suggesting that its stock price is 188% more volatile than the S&P 500.
Summary
Ramaco Resources beats Select Energy Services on 11 of the 13 factors compared between the two stocks.
