Analyzing Veralto (NYSE:VLTO) and ARQ (NASDAQ:ARQ)

ARQ (NASDAQ:ARQ) and Veralto (NYSE:VLTO) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

18.5% of ARQ shares are owned by institutional investors. Comparatively, 91.3% of Veralto shares are owned by institutional investors. 23.9% of ARQ shares are owned by insiders. Comparatively, 0.4% of Veralto shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ARQ and Veralto, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARQ	0	0	3	1	3.25
Veralto	0	4	5	0	2.56

ARQ currently has a consensus price target of $10.00, suggesting a potential upside of 52.91%. Veralto has a consensus price target of $114.00, suggesting a potential upside of 6.37%. Given ARQ’s stronger consensus rating and higher possible upside, research analysts clearly believe ARQ is more favorable than Veralto.

Profitability

This table compares ARQ and Veralto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARQ	-1.30%	-0.71%	-0.54%
Veralto	16.65%	41.45%	14.05%

Risk & Volatility

ARQ has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500. Comparatively, Veralto has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Earnings & Valuation

This table compares ARQ and Veralto”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARQ	$108.96 million	2.53	-$5.11 million	($0.05)	-130.80
Veralto	$5.19 billion	5.12	$833.00 million	$3.58	29.94

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

Summary

Veralto beats ARQ on 10 of the 15 factors compared between the two stocks.

About ARQ

Arq, Inc. is a holding company. It engages in the provision of environmental and emission control equipment to the power generation industry. The company operates through the following Segments: Refined Coal and Advanced Purification Technologies. The Refined Coal segment includes the Tinuum Group, Tinuum Services, and GWN Manager. The Advanced Purification Technologies segment refers to the sale of Activated Carbon Injection and Dry Sorbent Injection equipment systems, chemical sales, consulting services, and other sales related to the reduction of emissions in the coal-fired electric generation process and the electric utility industry. The company was founded in 1996 and is headquartered in Greenwood Village, CO.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.