Critical Contrast: Cactus (NYSE:WHD) versus Solaris Energy Infrastructure (NASDAQ:SEI)

Cactus (NYSE:WHD) and Solaris Energy Infrastructure (NASDAQ:SEI) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Cactus and Solaris Energy Infrastructure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cactus	16.57%	20.24%	14.32%
Solaris Energy Infrastructure	4.80%	6.66%	4.12%

Valuation and Earnings

This table compares Cactus and Solaris Energy Infrastructure”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cactus	$1.13 billion	4.02	$169.17 million	$2.82	20.31
Solaris Energy Infrastructure	$280.14 million	6.75	$24.34 million	$0.44	64.07

Cactus has higher revenue and earnings than Solaris Energy Infrastructure. Cactus is trading at a lower price-to-earnings ratio than Solaris Energy Infrastructure, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Cactus and Solaris Energy Infrastructure, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cactus	1	4	2	0	2.14
Solaris Energy Infrastructure	0	0	2	0	3.00

Cactus presently has a consensus target price of $56.40, suggesting a potential downside of 1.52%. Solaris Energy Infrastructure has a consensus target price of $30.00, suggesting a potential upside of 6.42%. Given Solaris Energy Infrastructure’s stronger consensus rating and higher possible upside, analysts clearly believe Solaris Energy Infrastructure is more favorable than Cactus.

Insider and Institutional Ownership

85.1% of Cactus shares are held by institutional investors. Comparatively, 67.4% of Solaris Energy Infrastructure shares are held by institutional investors. 17.7% of Cactus shares are held by company insiders. Comparatively, 34.7% of Solaris Energy Infrastructure shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Cactus pays an annual dividend of $0.52 per share and has a dividend yield of 0.9%. Solaris Energy Infrastructure pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Cactus pays out 18.4% of its earnings in the form of a dividend. Solaris Energy Infrastructure pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Cactus has a beta of 1.97, indicating that its share price is 97% more volatile than the S&P 500. Comparatively, Solaris Energy Infrastructure has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Summary

Cactus beats Solaris Energy Infrastructure on 9 of the 15 factors compared between the two stocks.

About Cactus

Cactus, Inc., together with its subsidiaries, designs, manufactures, sells, and leases pressure control and spoolable pipes in the United States, Australia, Canada, the Middle East, and internationally. It operates through two segments, Pressure Control and Spoolable Technologies. The Pressure Control segment designs, manufactures, sells, and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand name through service centers. Its products are sold and rented primarily for onshore unconventional oil and gas wells for drilling, completion, and production phases of the wells. This segment also provides field services to install, maintain, and handle the equipment. The Spoolable Technologies segment designs, manufactures, and sells spoolable pipes and associated end fittings under the FlexSteel brand name. Its products are primarily used to transport oil, gas, and other liquids. This segment also provides field services and rental items through service centers and pipe yards, as well as offers equipment and services internationally. In addition, the company offers repair and refurbishment services. Cactus, Inc. was founded in 2011 and is headquartered in Houston, Texas.

About Solaris Energy Infrastructure

Solaris Oilfield Infrastructure, Inc. designs and manufactures specialized equipment for oil and natural gas operators in the United States. The company provides mobile proppant and fluid management systems, as well as last mile logistics management services. It offers systems, mobilization, and last mile logistics services that are used to unload, store, and deliver proppant, water and/or chemicals at oil and natural gas well sites. The company is also involved in the transloading and storage of proppant or railcars at its transloading facility. In addition, it develops Railtronix, an inventory management software; and all-electric equipment that automates the low pressure section of oil and gas well completion sites. The company serves exploration and production, and oilfield services industries. Solaris Oilfield Infrastructure, Inc. was founded in 2014 and is headquartered in Houston, Texas.