Critical Survey: Superior Energy Services (NYSE:SPN) versus Ion Geophysical Corporation (IO)

Ion Geophysical Corporation (NYSE: IO) and Superior Energy Services (NYSE:SPN) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

Volatility & Risk

Ion Geophysical Corporation has a beta of 3.59, meaning that its share price is 259% more volatile than the S&P 500. Comparatively, Superior Energy Services has a beta of 2.14, meaning that its share price is 114% more volatile than the S&P 500.

Profitability

This table compares Ion Geophysical Corporation and Superior Energy Services’ 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%
Superior Energy Services -24.59% -26.18% -9.41%

Earnings and Valuation

This table compares Ion Geophysical Corporation and Superior Energy Services’ 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 0.48 $49.11 million ($3.27) -2.37
Superior Energy Services $1.55 billion 0.82 -$16.52 million ($2.81) -2.95

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

Insider & Institutional Ownership

33.7% of Ion Geophysical Corporation shares are held by institutional investors. 15.2% of Ion Geophysical Corporation shares are held by insiders. Comparatively, 2.9% of Superior Energy Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Ion Geophysical Corporation and Superior Energy Services, 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
Superior Energy Services 0 13 7 0 2.35

Superior Energy Services has a consensus price target of $13.82, indicating a potential upside of 66.75%. Given Superior Energy Services’ higher probable upside, analysts clearly believe Superior Energy Services is more favorable than Ion Geophysical Corporation.

Summary

Superior Energy Services beats Ion Geophysical Corporation on 7 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 Superior Energy Services

Superior Energy Services, Inc. provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and workover activities; Onshore Completion and Workover Services, which provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a range of well completion and maintenance services; Production Services, which provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and Technical Solutions, which provides services requiring specialized engineering, manufacturing or project planning.

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