US Well Services (USWS) vs. SemGroup (SEMG) Critical Review

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US Well Services (NASDAQ:USWS) and SemGroup (NYSE:SEMG) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

72.6% of US Well Services shares are held by institutional investors. Comparatively, 99.0% of SemGroup shares are held by institutional investors. 0.8% of SemGroup shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares US Well Services and SemGroup’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
US Well Services N/A -72.75% -12.67%
SemGroup -1.07% 0.58% 0.18%

Analyst Ratings

This is a summary of current recommendations for US Well Services and SemGroup, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
US Well Services 0 0 1 0 3.00
SemGroup 1 7 1 0 2.00

US Well Services presently has a consensus target price of $7.90, suggesting a potential upside of 5.19%. SemGroup has a consensus target price of $21.07, suggesting a potential upside of 48.70%. Given SemGroup’s higher possible upside, analysts plainly believe SemGroup is more favorable than US Well Services.

Dividends

SemGroup pays an annual dividend of $1.89 per share and has a dividend yield of 13.3%. US Well Services does not pay a dividend. SemGroup pays out -994.7% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares US Well Services and SemGroup’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
US Well Services $648.85 million 0.73 -$65.90 million N/A N/A
SemGroup $2.50 billion 0.45 -$26.75 million ($0.19) -74.58

SemGroup has higher revenue and earnings than US Well Services.

Summary

SemGroup beats US Well Services on 9 of the 12 factors compared between the two stocks.

About US Well Services

U.S. Well Services, Inc. operates as an oilfield service company in the United States. It provides hydraulic fracturing services for the oil and natural gas exploration and production companies. The company is headquartered in Houston, Texas.

About SemGroup

SemGroup Corporation provides gathering, transportation, storage, distribution, marketing, and other midstream services for producers, refiners of petroleum products, and other market participants. The company operates in three segments: U.S. Liquids, U.S. Gas, and Canada. The U.S. Liquids segment operates crude oil pipelines, truck transportation, storage, terminals, and marketing businesses; stores, blends, and transports refinery products and refinery feedstock through pipeline, barge, rail, truck, and ship; and operates a residual fuel oil storage terminal in the U.S. Gulf Coast. This segment has 18.2 million barrels of storage capacity on the Houston Ship Channel; and 7.6 million barrels of storage capacity at the Cushing Interchange. It also operates a 460-mile crude oil gathering and transportation pipeline system in Kansas and northern Oklahoma; 75-mile crude oil gathering pipeline system that transports crude oil from production facilities in the DJ Basin to the pipeline owned by White Cliffs Pipeline, L.L.C.; 2 parallel 527-mile pipelines that transports crude oil from Platteville, Colorado to Cushing, Oklahoma; 3 pipelines with an aggregate of 106 miles of pipe; 30-lane crude oil truck unloading facility in Platteville, Colorado; and crude oil trucking fleet of approximately 245 transport trucks and 235 trailers. The U.S. Gas segment provides natural gas gathering, processing, and marketing services. It operates 842 miles of gathering lines in Oklahoma; and a 53-mile high pressure gathering pipeline located in the STACK play. The Canada segment owns and operates natural gas processing and gathering facilities with approximately 530 miles of natural gas gathering and transportation pipelines in Alberta, Canada. SemGroup Corporation was founded in 2000 and is headquartered in Tulsa, Oklahoma.

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