Analyzing Cypress Energy Partners (CELP) and RigNet (RNET)

RigNet (NASDAQ: RNET) and Cypress Energy Partners (NYSE:CELP) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Volatility & Risk

RigNet has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Cypress Energy Partners has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Valuation & Earnings

This table compares RigNet and Cypress Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RigNet $200.61 million 1.34 $22.97 million ($0.65) -22.77
Cypress Energy Partners $291.50 million 0.30 $15.78 million $0.26 28.35

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

Analyst Ratings

This is a summary of recent recommendations for RigNet and Cypress Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RigNet 0 2 1 0 2.33
Cypress Energy Partners 0 2 0 0 2.00

RigNet presently has a consensus target price of $19.33, suggesting a potential upside of 30.63%. Cypress Energy Partners has a consensus target price of $8.00, suggesting a potential upside of 8.55%. Given RigNet’s stronger consensus rating and higher probable upside, equities research analysts plainly believe RigNet is more favorable than Cypress Energy Partners.

Profitability

This table compares RigNet and Cypress Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RigNet -5.69% -9.98% -4.94%
Cypress Energy Partners N/A N/A N/A

Dividends

Cypress Energy Partners pays an annual dividend of $0.84 per share and has a dividend yield of 11.4%. RigNet does not pay a dividend. Cypress Energy Partners pays out 323.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

98.4% of RigNet shares are owned by institutional investors. Comparatively, 0.7% of Cypress Energy Partners shares are owned by institutional investors. 1.2% of RigNet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

RigNet beats Cypress Energy Partners on 8 of the 15 factors compared between the two stocks.

RigNet Company Profile

RigNet, Inc. (RigNet) provides customized systems and solutions serving customers with data networking and operational requirements. The Company provides voice and data network, video conferencing and monitoring, crew welfare, asset and weather monitoring, and real-time data services. It operates through two segments: Managed Services, and Systems Integration and Automation (SI&A). The Managed Services segment provides remote communications services for offshore and onshore drilling rigs and production facilities, as well as, support vessels and other remote sites. The SI&A segment provides customized solutions for customer telecommunications systems. As of December 31, 2016, the Company provided remote communications and collaborative services to approximately 500 customers reaching approximately 900 remote sites located in approximately 50 countries on six continents. It provides managed remote communications, engineered telecommunications solutions and applications.

Cypress Energy Partners Company Profile

Cypress Energy Partners, L.P. is a limited partnership company, which serves energy companies throughout North America. The Company provides independent pipeline inspection and integrity services to producers and pipeline companies and water and environmental services with salt water disposal (SWD) facilities to the United States onshore oil and natural gas producers and trucking companies. It operates through three segments: Pipeline Inspection Services (PIS), which provides independent inspection services to various energy, public utility and pipeline companies in both the United States and Canada; Integrity Services (IS), which provides hydrostatic testing services to natural gas and petroleum companies and pipeline construction companies of newly constructed and existing natural gas and petroleum pipelines, and Water and Environmental Services (W&ES), which provides SWD services to oil and natural gas producers and trucking companies.

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