Reviewing Enerflex (NYSE:EFXT) & USA Compression Partners (NYSE:USAC)

USA Compression Partners (NYSE:USAC) and Enerflex (NYSE:EFXT) are both mid-cap energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Dividends

USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 8.4%. Enerflex pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. USA Compression Partners pays out 198.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enerflex pays out 20.7% of its earnings in the form of a dividend. Enerflex has increased its dividend for 1 consecutive years.

Insider and Institutional Ownership

47.8% of USA Compression Partners shares are owned by institutional investors. Comparatively, 46.5% of Enerflex shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for USA Compression Partners and Enerflex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USA Compression Partners	0	5	0	1	2.33
Enerflex	1	1	6	1	2.78

USA Compression Partners currently has a consensus price target of $29.50, indicating a potential upside of 18.04%. Enerflex has a consensus price target of $38.00, indicating a potential upside of 66.08%. Given Enerflex’s stronger consensus rating and higher probable upside, analysts plainly believe Enerflex is more favorable than USA Compression Partners.

Volatility and Risk

USA Compression Partners has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Enerflex has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500.

Profitability

This table compares USA Compression Partners and Enerflex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USA Compression Partners	12.43%	179.77%	4.83%
Enerflex	2.94%	13.15%	5.45%

Earnings and Valuation

This table compares USA Compression Partners and Enerflex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USA Compression Partners	$1.18 billion	3.08	$111.32 million	$1.06	23.58
Enerflex	$2.57 billion	1.09	$64.00 million	$0.58	39.45

USA Compression Partners has higher earnings, but lower revenue than Enerflex. USA Compression Partners is trading at a lower price-to-earnings ratio than Enerflex, indicating that it is currently the more affordable of the two stocks.

Summary

Enerflex beats USA Compression Partners on 9 of the 16 factors compared between the two stocks.

About USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.

About Enerflex

Enerflex Ltd. offers energy infrastructure and energy transition solutions to natural gas markets in North America, Latin America, and the Eastern Hemisphere. The company provides natural gas compression infrastructure, processing, and treated water infrastructure under contract to oil and natural gas customers; power generation rental solutions; custom and standard compression packages for reciprocating and screw compressor applications; re-engineering, re-configuration, and re-packaging of compressors for various field applications; integrated turnkey power generation, gas compression, processing facilities, natural gas compression, processing, and electric power solutions; after-market mechanical services and parts distribution, as well as maintenance solutions to the oil and natural gas industry, operations, and overhaul services; and equipment supply, parts supply, and general asset management. It also designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, low-carbon solutions, cryogenic systems, electric power solutions, and treated water solutions; and engages in the engineering, design, procurement, project management, and construction services for compression, process, treated water, and power generation equipment, as well as after-market service, parts, and operations and maintenance services for gas compression, processing, and treated water facilities in the region. The company was formerly known as Enerflex Systems Income Fund and changed its name to Enerflex Ltd. in January 2010. Enerflex Ltd. was founded in 1980 and is headquartered in Calgary, Canada.