Archrock Story

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AROC -- USA Stock  

USD 5.41  0.03  0.56%

While many traders are getting carried away by overanalyzing competition within energy space, it is quite reasonable to go over both, Archrock and Franks International as potential short-term investments. We are going to analyze some of the competitive aspects of both Archrock and Franks.
Published over a month ago
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Are Archrock (NYSE:AROC) investors shifting to Franks (NYSE:FI)?
By analyzing existing basic indicators between Archrock and Franks, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Franks with a short position in Archrock. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Archrock has an asset utilization ratio of 36.17 percent. This suggests that the company is making $0.36 for each dollar of assets. An increasing asset utilization means that Archrock is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Archrock or Franks is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

UNDERSTANDING Archrock dividends

A dividend is the distribution of a portion of Archrock earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Archrock dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Archrock one year expected dividend income is about $0.37 per share.
Archrock Dividend Yield is projected to increase slightly based on the last few years of reporting. The past year's Dividend Yield was at 0.06. The current year Dividends per Basic Common Share is expected to grow to 0.57, whereas Payment of Dividends and Other Cash Distributions is forecasted to decline to (80.6 M).
Last ReportedProjected for 2020
Payment of Dividends and Other Cash Distributions-78.5 M-80.6 M
Dividend Yield 0.06  0.06 
Dividends per Basic Common Share 0.55  0.57 
Investing in dividend-paying stocks, such as Archrock is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Archrock must own a stock before its ex-dividend date to receive its next dividend. This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Archrock. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

How important is Archrock's Liquidity

Archrock financial leverage refers to using borrowed capital as a funding source to finance Archrock ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Archrock financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Archrock's total debt and its cash.

Correlation Between Archrock and Franks International

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Archrock together with similar or unrelated positions with a negative correlation. For example, you can also add Franks International to your portfolio. If Franks International is not perfectly correlated to Archrock it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Archrock for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between AROC and FI for more information.

Note

Are you currently holding both Archrock and Franks International in your portfolio? Please note if you are using this as a pair-trade strategy between Archrock and Franks International, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Archrock exotic insider transaction detected

Legal trades by Archrock insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Archrock insider trading alert for general transaction of common stock by Eric Thode, SR VICE PRESIDENT, on 24th of August 2020. This event was filed by Archrock Inc with SEC on 2020-08-24. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper Perspective

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check Archrock revenue. Based on the latest financial disclosure, Archrock reported 979.02 M of revenue. This is 98.01% lower than that of the Energy sector and 69.07% lower than that of the Oil & Gas Equipment & Services industry. The revenue for all United States stocks is 89.62% higher than that of Archrock. As for Franks International we see revenue of 559 M, which is 82.34% lower than that of the Oil & Gas Equipment & Services

Archrock979.02 Million
Sector3.17 Billion
Franks559 Million
979 M
Archrock
3.2 B
Sector
Franks

Anything left for Archrock after the slip?

Current standard deviation is at 4.37. Archrock shows above-average downside volatility for the selected time horizon. We advise investors to inspect Archrock further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Archrock future alpha.

The Bottom Line

Whereas few other entities within the oil & gas equipment & services industry are still a little expensive, even after the recent corrections, Archrock may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither purchase nor exit any shares of Archrock at this time. The Archrock risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Archrock.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Archrock. Please refer to our Terms of Use for any information regarding our disclosure principles.

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