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Matrix Service (NASDAQ: MTRX) and Fairmount Santrol (NYSE:FMSA) are both small-cap energy companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Volatility and Risk

Matrix Service has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Fairmount Santrol has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500.

Insider and Institutional Ownership

88.3% of Matrix Service shares are held by institutional investors. Comparatively, 75.3% of Fairmount Santrol shares are held by institutional investors. 2.5% of Matrix Service shares are held by insiders. Comparatively, 9.8% of Fairmount Santrol shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Matrix Service and Fairmount Santrol, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Matrix Service 0 2 0 0 2.00
Fairmount Santrol 1 8 11 0 2.50

Fairmount Santrol has a consensus price target of $5.95, indicating a potential upside of 4.52%. Given Fairmount Santrol’s stronger consensus rating and higher probable upside, analysts plainly believe Fairmount Santrol is more favorable than Matrix Service.

Valuation and Earnings

This table compares Matrix Service and Fairmount Santrol’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Matrix Service $1.20 billion 0.41 -$180,000.00 ($0.22) -82.50
Fairmount Santrol $535.01 million 2.38 -$140.19 million $0.05 113.80

Matrix Service has higher revenue and earnings than Fairmount Santrol. Matrix Service is trading at a lower price-to-earnings ratio than Fairmount Santrol, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Matrix Service and Fairmount Santrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Matrix Service -0.51% -1.75% -0.96%
Fairmount Santrol 1.69% 4.05% 0.86%

Summary

Fairmount Santrol beats Matrix Service on 11 of the 14 factors compared between the two stocks.

Matrix Service Company Profile

Matrix Service Company provides engineering, fabrication, infrastructure, construction and maintenance services primarily to the oil, gas, power, petrochemical, industrial, mining and minerals markets. The Company’s segments include Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. The Electrical Infrastructure segment primarily includes construction and maintenance services to a range of power generation facilities, such as combined cycle plants, natural gas fired power stations and renewable energy installations. The Oil Gas & Chemical segment includes turnaround activities, plant maintenance services and construction in the downstream petroleum industry. The Storage Solutions segment includes new construction of crude and refined products aboveground storage tanks (ASTs), as well as planned and emergency maintenance services. The Industrial segment includes construction and maintenance work in the iron and steel and mining and minerals industries.

Fairmount Santrol Company Profile

Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.



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