Critical Analysis: CGG (CGG) & Dawson Geophysical (DWSN)

CGG (NYSE: CGG) and Dawson Geophysical (NASDAQ:DWSN) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

0.3% of CGG shares are held by institutional investors. Comparatively, 61.1% of Dawson Geophysical shares are held by institutional investors. 8.0% of Dawson Geophysical shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for CGG and Dawson Geophysical, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CGG 0 0 1 0 3.00
Dawson Geophysical 0 0 0 0 N/A

Valuation & Earnings

This table compares CGG and Dawson Geophysical’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CGG $1.32 billion 0.03 -$514.90 million ($21.46) -0.09
Dawson Geophysical $157.15 million 0.90 -$31.26 million ($1.44) -4.49

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

Dividends

CGG pays an annual dividend of $1.38 per share and has a dividend yield of 68.7%. Dawson Geophysical does not pay a dividend. CGG pays out -6.4% of its earnings in the form of a dividend.

Profitability

This table compares CGG and Dawson Geophysical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CGG -39.01% -66.78% -11.14%
Dawson Geophysical -19.90% -20.97% -18.23%

Volatility and Risk

CGG has a beta of 2.4, meaning that its share price is 140% more volatile than the S&P 500. Comparatively, Dawson Geophysical has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Summary

Dawson Geophysical beats CGG on 7 of the 13 factors compared between the two stocks.

CGG Company Profile

CGG SA (CGG) is a manufacturer of geophysical equipment. The Company provides marine, land and airborne data acquisition services, as well as a range of other geoscience services, including data imaging, geoscience and petroleum engineering consulting services, and collecting, developing and licensing geological data. Its segments include Contractual Data Acquisition; Geology, Geophysics & Reservoir (GGR); Equipment, and Non-Operated Resources. The Contractual Data Acquisition includes marine, and land and multi-physics. Its GGR segment includes the Multi-client business line and the Subsurface Imaging and Reservoir business lines (processing and imaging of geophysical data, reservoir characterization, geophysical consulting and software services, geological data library and data management solutions). The Equipment segment consists of its manufacturing and sales activities for seismic equipment. It operates through Saturno, a multi-client survey over Santos Basin Offshore Brazil.

Dawson Geophysical Company Profile

Dawson Geophysical Company, formerly TGC Industries, Inc., is a provider of onshore seismic data acquisition and processing services with operations throughout the United States and Canada. The Company acquires and processes two-dimensional (2-D), three-dimensional (3-D) and multi-component seismic data for its clients, ranging from oil and gas companies to independent oil and gas operators, as well as providers of multi-client data libraries. It operates through contract seismic data acquisition and processing services segment. It operates approximately 10 seismic crews, consisting of over eight crews in the United States and approximately two crews in Canada, and a seismic data processing center. It owns equipment for over 20 land-based seismic data acquisition crews, approximately 220 vibrator energy source units, over 248,000 recording channels and approximately 20 central recording systems.

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