Ion Geophysical Corporation (NYSE: IO) and McDermott International (NYSE:MDR) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Profitability

This table compares Ion Geophysical Corporation and McDermott International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ion Geophysical Corporation -20.03% -91.64% -12.33%
McDermott International 2.95% 5.55% 2.78%

Risk & Volatility

Ion Geophysical Corporation has a beta of 3.59, suggesting that its share price is 259% more volatile than the S&P 500. Comparatively, McDermott International has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Insider & Institutional Ownership

33.5% of Ion Geophysical Corporation shares are owned by institutional investors. Comparatively, 87.1% of McDermott International shares are owned by institutional investors. 15.2% of Ion Geophysical Corporation shares are owned by insiders. Comparatively, 1.3% of McDermott International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Ion Geophysical Corporation and McDermott International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ion Geophysical Corporation 0 0 0 0 N/A
McDermott International 0 4 3 0 2.43

McDermott International has a consensus target price of $8.47, suggesting a potential upside of 16.46%. Given McDermott International’s higher probable upside, analysts plainly believe McDermott International is more favorable than Ion Geophysical Corporation.

Earnings & Valuation

This table compares Ion Geophysical Corporation and McDermott International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ion Geophysical Corporation $192.55 million 0.59 $49.11 million ($3.27) -2.91
McDermott International $2.51 billion 0.82 $304.29 million $0.27 26.93

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

Summary

McDermott International beats Ion Geophysical Corporation on 10 of the 12 factors compared between the two stocks.

About Ion Geophysical Corporation

ION Geophysical Corporation is a technology-focused company. It provides geophysical technology, services and solutions to the global oil and gas industry. Its offerings are designed to enable oil and gas exploration and production (E&P) companies to obtain images of the Earth’s subsurface. It offers services and products through three segments: E&P Technology & Services, E&P Operations Optimization, and Ocean Bottom Services. E&P Technology & Services provides services and products for complex and hard-to-image geologies, such as deepwater subsalt formations in the Gulf of Mexico and offshore East and West Africa and Brazil; unconventional reservoirs, such as those found onshore in shale, tight gas and oil sands formations, and offshore basin-wide seismic data and imaging programs. E&P Operations Optimization combines its Optimization Software and Services and Devices offerings. Ocean Bottom Services consists of OceanGeo, an ocean bottom data acquisition services company.

About McDermott International

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.

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