Critical Review: Hurricane Energy (OTCMKTS:HRCXF) and Nine Energy Service (NYSE:NINE)

Hurricane Energy (OTCMKTS:HRCXF) and Nine Energy Service (NYSE:NINE) 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 earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Valuation and Earnings

This table compares Hurricane Energy and Nine Energy Service’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hurricane Energy $170.28 million 0.56 $19.90 million $0.01 4.76
Nine Energy Service $832.94 million 0.14 -$217.75 million $0.32 11.25

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

Insider and Institutional Ownership

50.4% of Nine Energy Service shares are held by institutional investors. 3.6% of Nine Energy Service shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Hurricane Energy and Nine Energy Service, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hurricane Energy 1 4 0 0 1.80
Nine Energy Service 1 8 0 0 1.89

Nine Energy Service has a consensus price target of $3.00, suggesting a potential downside of 16.67%. Given Nine Energy Service’s stronger consensus rating and higher possible upside, analysts clearly believe Nine Energy Service is more favorable than Hurricane Energy.

Risk and Volatility

Hurricane Energy has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Nine Energy Service has a beta of 3.74, indicating that its share price is 274% more volatile than the S&P 500.

Profitability

This table compares Hurricane Energy and Nine Energy Service’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hurricane Energy N/A N/A N/A
Nine Energy Service -136.82% -65.52% -17.29%

Summary

Nine Energy Service beats Hurricane Energy on 7 of the 13 factors compared between the two stocks.

Hurricane Energy Company Profile

Hurricane Energy plc, together with its subsidiaries, discovers, appraises, and develops oil from fractured basement reservoirs. The company has a portfolio of contiguous offshore licenses on the United Kingdom Continental Shelf, West of Shetland. Its producing oil fields include Clair, Foinaven, and Schiehallion; licenses focuses on the Rona Ridge, a major NE-SW trending basement; and assets comprise Lancaster, Whirlwind, Lincoln, Halifax, and Warwick. Hurricane Energy plc has an estimated contingent resources of approximately 2 billion barrels of oil equivalent. The company was formerly known as Hurricane Exploration plc and changed its name to Hurricane Energy plc in April 2013. Hurricane Energy plc was founded in 2004 and is headquartered in Godalming, the United Kingdom.

Nine Energy Service Company Profile

Nine Energy Service, Inc. operates as an onshore completion services provider that targets unconventional oil and gas resource development across North American basins and internationally. It offers cementing services, which consist of blending high-grade cement and water with various solid and liquid additives to create a cement slurry that is pumped between the casing and the wellbore of the well. The company also provides a portfolio of completion tools, such as liner hangers and accessories, fracture isolation packers, frac sleeves, stage one prep tools, frac plugs, casing flotation tools, specialty open hole float equipment, disk subs, composite cement retainers, and centralizers that provide pinpoint frac sleeve system technologies. In addition, it offers wireline services consisting of plug-and-perf completions, which is a multistage well completion technique for cased-hole wells that consists of deploying perforating guns and isolation tools to a specified depth; and coiled tubing services, which perform wellbore intervention operations utilizing a continuous steel pipe that is transported to the wellsite wound on a large spool in lengths of up to 30,000 feet. Nine Energy Service, Inc. operates 47 wireline pumpdown units and 14 coiled tubing units. The company was formerly known as NSC-Tripoint, Inc. and changed its name to Nine Energy Service, Inc. in October 2011. Nine Energy Service, Inc. was incorporated in 2011 and is headquartered in Houston, Texas.

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