Critical Survey: CSI Compressco (CCLP) vs. Core Laboratories (CLB)

CSI Compressco (NASDAQ: CCLP) and Core Laboratories (NYSE:CLB) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CSI Compressco and Core Laboratories, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSI Compressco 1 3 0 0 1.75
Core Laboratories 0 5 6 0 2.55

CSI Compressco presently has a consensus target price of $5.33, indicating a potential downside of 2.50%. Core Laboratories has a consensus target price of $111.33, indicating a potential upside of 1.63%. Given Core Laboratories’ stronger consensus rating and higher possible upside, analysts plainly believe Core Laboratories is more favorable than CSI Compressco.

Profitability

This table compares CSI Compressco and Core Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CSI Compressco -14.20% -35.88% -5.70%
Core Laboratories 12.06% 52.89% 13.98%

Institutional & Insider Ownership

27.4% of CSI Compressco shares are held by institutional investors. 1.0% of Core Laboratories shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

CSI Compressco pays an annual dividend of $0.75 per share and has a dividend yield of 13.7%. Core Laboratories pays an annual dividend of $2.20 per share and has a dividend yield of 2.0%. CSI Compressco pays out -60.0% of its earnings in the form of a dividend. Core Laboratories pays out 126.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CSI Compressco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares CSI Compressco and Core Laboratories’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CSI Compressco $311.36 million 0.64 -$138.13 million ($1.25) -4.38
Core Laboratories $594.74 million 8.13 $63.89 million $1.74 62.96

Core Laboratories has higher revenue and earnings than CSI Compressco. CSI Compressco is trading at a lower price-to-earnings ratio than Core Laboratories, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

CSI Compressco has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500. Comparatively, Core Laboratories has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Summary

Core Laboratories beats CSI Compressco on 12 of the 16 factors compared between the two stocks.

About CSI Compressco

CSI Compressco LP is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. It is a service provider of natural gas compression services in the United States, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines. As of December 31, 2016, its fleet included approximately 6,000 compressor packages.

About Core Laboratories

Core Laboratories N.V. provides reservoir description, production enhancement and reservoir management services to the oil and gas industry. The Company operates through three segments: Reservoir Description, Production Enhancement and Reservoir Management. The Reservoir Description segment encompasses the characterization of petroleum reservoir rock, fluid and gas samples. It provides analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry. The Production Enhancement segment includes products and services relating to reservoir well completions, perforations, stimulations and production. It provides integrated diagnostic services to evaluate the effectiveness of well completions. The Reservoir Management segment combines and integrates information from reservoir description and production enhancement services to increase production and recovery of oil and gas from its clients’ reservoirs.

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