McDermott International (NYSE: MDR) and Geospace Technologies (NASDAQ:GEOS) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Profitability

This table compares McDermott International and Geospace Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McDermott International 5.25% 9.56% 4.80%
Geospace Technologies -77.04% -26.21% -25.12%

Institutional and Insider Ownership

86.1% of McDermott International shares are owned by institutional investors. Comparatively, 76.5% of Geospace Technologies shares are owned by institutional investors. 1.3% of McDermott International shares are owned by company insiders. Comparatively, 3.5% of Geospace Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

McDermott International has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Geospace Technologies has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Valuation & Earnings

This table compares McDermott International and Geospace Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McDermott International $2.64 billion 0.80 $34.11 million $0.54 13.69
Geospace Technologies $73.72 million 2.57 -$56.79 million ($4.32) -3.26

McDermott International has higher revenue and earnings than Geospace Technologies. Geospace Technologies is trading at a lower price-to-earnings ratio than McDermott International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for McDermott International and Geospace Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McDermott International 0 4 3 0 2.43
Geospace Technologies 0 0 0 0 N/A

McDermott International presently has a consensus price target of $7.93, indicating a potential upside of 7.24%. Given McDermott International’s higher possible upside, research analysts plainly believe McDermott International is more favorable than Geospace Technologies.

Summary

McDermott International beats Geospace Technologies on 10 of the 12 factors compared between the two stocks.

McDermott International Company Profile

McDermott International, Inc. is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects. It operates through three segments: the Americas, Europe and Africa (AEA), the Middle East (MEA) and Asia (ASA). As of December 31, 2016, operated in approximately 20 countries across the Americas, Europe, Africa, the Middle East, Asia and Australia, its integrated resources include a diversified fleet of marine vessels, fabrication facilities and engineering offices. It support its activities with project management and procurement services, while utilizing its fully integrated capabilities in both shallow water and deepwater construction.

Geospace Technologies Company Profile

Geospace Technologies Corporation designs and manufactures instruments and equipment used by the oil and gas industry to acquire seismic data in order to locate, characterize and monitor hydrocarbon producing reservoirs. The Company also designs and manufactures non-seismic products, including industrial products, offshore cables and imaging equipment. The Company operates through two segments: Seismic and Non-Seismic. The Company’s Seismic product segments include traditional exploration products, wireless exploration products and reservoir products. Its seismic product lines consist of land and marine nodal data acquisition systems, permanent land and seabed reservoir monitoring products and services, geophones and geophone strings, hydrophones, leader wire, connectors, telemetry cables, marine streamer retrieval and steering devices and various other products. The Company’s Non-Seismic product segments include imaging and industrial products.

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