Critical Analysis: Exterran (EXTN) & Forum Energy Technologies (FET)

Exterran (NYSE: EXTN) and Forum Energy Technologies (NYSE:FET) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Volatility and Risk

Exterran has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Forum Energy Technologies has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.

Earnings and Valuation

This table compares Exterran and Forum Energy Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exterran $1.03 billion 1.14 -$227.93 million ($0.02) -1,642.50
Forum Energy Technologies $587.60 million 3.05 -$81.97 million ($1.26) -13.17

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

Insider & Institutional Ownership

88.6% of Exterran shares are held by institutional investors. Comparatively, 95.7% of Forum Energy Technologies shares are held by institutional investors. 2.2% of Exterran shares are held by company insiders. Comparatively, 32.8% of Forum Energy Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Exterran and Forum Energy Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exterran 0 1 0 0 2.00
Forum Energy Technologies 0 12 2 0 2.14

Exterran presently has a consensus price target of $28.00, indicating a potential downside of 14.76%. Forum Energy Technologies has a consensus price target of $17.92, indicating a potential upside of 7.97%. Given Forum Energy Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Forum Energy Technologies is more favorable than Exterran.

Profitability

This table compares Exterran and Forum Energy Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exterran 0.04% -2.82% -1.11%
Forum Energy Technologies -16.85% -3.97% -2.63%

Summary

Forum Energy Technologies beats Exterran on 8 of the 13 factors compared between the two stocks.

About Exterran

Exterran Corporation provides compression, production and processing products and services that support the production and transportation of oil and natural gas around the world. The Company operates through three segments: contract operations, aftermarket services, and oil and gas product sales. The contract operations segment provides natural gas compression services, production and processing equipment services, and maintenance services to meet specific customer requirements on assets owned by it. The aftermarket services segment provides a range of services to support the surface production, compression and processing needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. The oil and gas product sales segment provides design, engineering, manufacturing, installation and sale of natural gas compression units, and accessories and equipment used in the production, treating and processing of crude oil and natural gas.

About Forum Energy Technologies

Forum Energy Technologies, Inc. is an oilfield products company. The Company designs, manufactures and distributes products, and engages in aftermarket services, parts supply and related services. The Company operates through three segments: Drilling & Subsea, Completions, and Production & Infrastructure. The Drilling & Subsea segment designs and manufactures products, and provides related services to the drilling and subsea construction markets. The Completions segment designs, manufactures and supplies products, and provide related services to the well construction, completion, stimulation and intervention markets. The Production & Infrastructure segment designs, manufactures and supplies products, and provides related equipment and services to production and infrastructure markets. Its product offering includes a mix of engineered capital products and replaced items that are used in the exploration, development, production and transportation of oil and natural gas.

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