Archrock vs Magnolia Oil & Gas

Archrock (Archrock Inc.) and Magnolia Oil & Gas (MAGNOLIA OIL & GAS CORP - A) are compared on business models, financial performance, and market context to present a neutral, accessible view of their activities. Educational content, not financial advice.

Comparison Snapshot

Key Financial Metrics

AROC

Metric

MGY

$4.72B

Market Cap

$4.27B

12.74%

Potential Profit

14.03%

Buy

Analyst Rating

Buy

Investment Analysis

Archrock

AROC

Pros

Archrock has a PE ratio of 18.23, indicating reasonable valuation relative to peers in the oilfield services sector.
The company operates in a niche market providing essential compression services to midstream energy sectors, supporting stable demand.
Archrock benefits from a solid market cap around $4.85 billion, signaling a mid-sized company with significant operational scale.

Considerations

The PE ratio is above several comparable industry peers, suggesting possible overvaluation or lower growth expectations.
Archrock’s business is highly sensitive to fluctuations in natural gas and oil production volumes, exposing it to commodity cyclicality.
The company faces risks related to execution and operational efficiency in a capital-intensive energy services environment.

Magnolia Oil & Gas

MGY

Pros

Magnolia Oil & Gas reported a revenue increase of 7.25% to $1.32 billion in 2024, demonstrating growth in operations.
The company maintains a dividend yield near 2.5%, offering income alongside growth opportunities.
Magnolia's assets are concentrated in prolific US shale formations like Eagle Ford and Austin Chalk, providing strong resource potential.

Considerations

Net income fell by 5.84% in the latest year, highlighting margin pressure or operational challenges despite revenue growth.
The stock trades with a beta of 1.31, indicating higher volatility and sensitivity to market fluctuations.
Analyst consensus is predominantly ‘Hold’ with a modest price target increase, reflecting limited near-term upside expectations.

About The Companies

Archrock (AROC)

Archrock Inc. is an American energy infrastructure company that specialises in midstream natural gas compression. Its services are crucial for transporting natural gas from production areas to consumers through pipelines across the United States. The company operates through two main business segments. The 'Contract Operations' segment involves leasing its own fleet of compression equipment and providing the personnel to run it. The 'Aftermarket Services' division offers maintenance, repair, overhaul, and parts for customers who own their own compression equipment. By providing these essential services, Archrock plays a significant role in the US energy value chain. As with any company in the energy sector, its performance can be influenced by factors like commodity prices and regulatory changes. Potential investors should consider these aspects as part of their research, remembering that all investments carry risk and past performance is not a guide to the future.

Magnolia Oil & Gas (MGY)

Magnolia Oil & Gas is an independent energy company focused on the exploration, development, and production of oil and natural gas. Its primary operations are strategically located in South Texas, within the productive Eagle Ford Shale and Austin Chalk formations. The company holds significant acreage in two key areas: Karnes and Giddings. This geographical focus allows it to concentrate its expertise and resources on these well-established oil and gas fields. As an upstream energy firm, its financial performance is often linked to the broader cycles of global energy markets and commodity prices for oil and gas. Investors might watch companies like Magnolia for their role in the US energy sector, but it's important to remember that the value of such investments can fluctuate, and past performance doesn't guarantee future returns.

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Archrock vs Magnolia Oil & Gas

Comparison Snapshot

Investment Analysis

Archrock

Pros

Considerations

Magnolia Oil & Gas

Pros

Considerations

About The Companies

Buy AROC or MGY in Nemo

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6% Interest on Cash

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Frequently asked questions

What does a price–earnings (PE) ratio tell us in this comparison, and how should I interpret Archrock’s 18.23 versus peers?

Why are dividends and earnings important when comparing Archrock and Magnolia Oil & Gas?

What does market cap tell us about the size and potential stability of Archrock in this comparison?

How should I weigh Magnolia Oil & Gas’s revenue growth against its net income decline in this context?

What role does stock beta play in understanding risk for Magnolia Oil & Gas here?

How should I interpret analyst sentiment in this comparison, given Magnolia’s Hold consensus and modest price target?

What market factors could affect Archrock’s demand for compression services?

How does the geographic focus of Magnolia Oil & Gas influence its market risk profile?

What should a beginner compare when evaluating these two stocks side-by-side beyond the numbers?

Is there a clear takeaway from this comparison about which stock is ‘stronger’ or more suitable for all investors?

Why is it important to understand both business models and financial performance in a stock comparison?

What educational disclaimer should readers keep in mind when using this page?

Comparison Snapshot

About The Companies