Investors are weighing the strengths and weaknesses of two small-cap energy companies, Dawson Geophysical (NASDAQ: DWSN) and ProFrac (NASDAQ: ACDC), as they seek superior investment opportunities in the sector. This comparison evaluates their profitability, dividends, institutional ownership, valuation, earnings, risk, and analyst recommendations.
Risk and Volatility Analysis
In assessing the risk associated with these two stocks, it is notable that Dawson Geophysical has a beta of -0.1, indicating that its stock price is 110% less volatile than the S&P 500. On the other hand, ProFrac has a beta of 1.71, meaning its stock price is 71% more volatile than the benchmark index. This significant difference suggests that investors in ProFrac may experience greater fluctuations in their investment compared to those in Dawson Geophysical.
Profitability and Valuation
A closer look at the companies reveals that while Dawson Geophysical enjoys higher earnings, it has lower revenue figures compared to ProFrac. The price-to-earnings ratio further highlights the value proposition: Dawson Geophysical is currently trading at a lower ratio than ProFrac, suggesting it is the more affordable option for investors seeking value stocks.
Analysts have also weighed in on the two companies. According to data from MarketBeat.com, ProFrac has a consensus target price of $5.25, indicating a potential upside of 40%. This figure has led analysts to favor ProFrac over Dawson Geophysical, reflecting a more optimistic outlook for the former.
Institutional and insider ownership figures provide further context for potential investors. Approximately 7.9% of Dawson Geophysical shares are owned by institutional investors, while ProFrac has a higher institutional ownership at 12.8%. Insider ownership also differs: 0.3% of shares in Dawson Geophysical are held by company insiders compared to 2.6% for ProFrac. Strong institutional ownership can be an indicator of confidence in a company’s long-term growth prospects.
Company Overviews
Dawson Geophysical, founded in 1952 and headquartered in Midland, Texas, provides onshore seismic data acquisition and processing services across the United States and Canada. The company specializes in acquiring and processing 2-D, 3-D, and multi-component seismic data for clients, including major oil and gas operators and independent firms. Its services support exploration and development activities for oil and natural gas in various regions, as well as projects related to carbon capture sequestration.
In contrast, ProFrac Holding Corp., established in 2016 and based in Willow Park, Texas, operates as a technology-focused energy services holding company. It functions through three main segments: Stimulation Services, Manufacturing, and Proppant Production. The company’s offerings include hydraulic fracturing, well stimulation, in-basin frac sand, and complementary products tailored for upstream oil and natural gas companies.
In summary, Dawson Geophysical outperforms ProFrac in seven of the thirteen factors analyzed. Investors will need to weigh the implications of volatility, profitability, and institutional backing when making decisions regarding these two companies.
