Head to Head Analysis: Key Energy Services (NYSE:KEG) and Keane Group (NYSE:FRAC)

Key Energy Services (NYSE:KEG) and Keane Group (NYSE:FRAC) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Key Energy Services and Keane Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Key Energy Services -17.26% -383.21% -21.26%
Keane Group 2.24% 13.57% 6.19%

Insider and Institutional Ownership

48.0% of Key Energy Services shares are held by institutional investors. Comparatively, 89.5% of Keane Group shares are held by institutional investors. 1.6% of Key Energy Services shares are held by insiders. Comparatively, 0.5% of Keane Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Key Energy Services and Keane Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Key Energy Services 0 3 1 0 2.25
Keane Group 0 3 11 0 2.79

Key Energy Services presently has a consensus target price of $5.08, indicating a potential upside of 75.89%. Keane Group has a consensus target price of $16.70, indicating a potential upside of 144.15%. Given Keane Group’s stronger consensus rating and higher possible upside, analysts clearly believe Keane Group is more favorable than Key Energy Services.

Risk and Volatility

Key Energy Services has a beta of 3.95, indicating that its share price is 295% more volatile than the S&P 500. Comparatively, Keane Group has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Earnings & Valuation

This table compares Key Energy Services and Keane Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Key Energy Services $521.70 million 0.11 -$88.80 million ($4.53) -0.64
Keane Group $2.14 billion 0.34 $59.33 million $0.92 7.43

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

Summary

Keane Group beats Key Energy Services on 12 of the 14 factors compared between the two stocks.

About Key Energy Services

Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States. It operates through Rig Services, Fishing and Rental Services, Coiled Tubing Services, and Fluid Management Services segments. The Rig Services segment is involved in the completion of newly drilled wells; workover and recompletion of existing oil and natural gas wells; well maintenance activities; and plugging and abandonment of wells at the end of their useful lives, as well as provision of specialty drilling services to oil and natural gas producers. The Fishing and Rental Services segment provides fishing services that involve recovering lost or stuck equipment in the wellbore utilizing fishing tools; and rents drill pipes, tubulars, handling tools, pressure-control equipment, pumps, power swivels, reversing units, and foam air units. The Coiled Tubing Services segment offers services for wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations; mills temporary isolation plugs that separate frac zones; and other pre- and post-hydraulic fracturing well preparation services. The Fluid Management Services segment offers transportation and well-site storage services for fluids utilized in drilling, completions, workover, and maintenance activities; and disposal services for fluids produced subsequent to well completion. It also operates a fleet of hot oilers used to clear soluble restrictions in a wellbore. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is based in Houston, Texas.

About Keane Group

Keane Group, Inc. engages in the provision of hydraulic and engineered related solutions. It provides horizontal and vertical fracturing, wireline perforation and logging & engineered, as well as other value-added services. The company operates through two segments: Completion, and Other Services. The Completion Services segment refers to the hydraulic fracturing and wireline divisions. The Other Services include coiled tubing, cementing and ancillary services. The company was founded in 1973 and is headquartered in Houston, TX.

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