Contrasting Avalon (NYSE:AWX) & Fuel Tech (NASDAQ:FTEK)

Fuel Tech (NASDAQ:FTEK) and Avalon (NYSE:AWX) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Risk & Volatility

Fuel Tech has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Avalon has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Fuel Tech and Avalon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fuel Tech	2	0	0	0	1.00
Avalon	0	0	0	0	0.00

Earnings & Valuation

This table compares Fuel Tech and Avalon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fuel Tech	$26.68 million	1.70	-$2.32 million	($0.11)	-13.18
Avalon	$85.78 million	0.13	-$1.77 million	$0.31	8.97

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

Profitability

This table compares Fuel Tech and Avalon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fuel Tech	-12.75%	-8.88%	-7.62%
Avalon	1.17%	2.72%	1.10%

Insider and Institutional Ownership

20.9% of Fuel Tech shares are owned by institutional investors. Comparatively, 34.4% of Avalon shares are owned by institutional investors. 9.8% of Fuel Tech shares are owned by insiders. Comparatively, 20.0% of Avalon shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Avalon beats Fuel Tech on 9 of the 12 factors compared between the two stocks.

About Fuel Tech

Fuel Tech, Inc. provides boiler optimization, efficiency improvement, and air pollution reduction and control solutions to utility and industrial customers worldwide. The company operates through Air Pollution Control Technology and FUEL CHEM Technology segments. The Air Pollution Control Technology segment offers technologies to reduce nitrogen oxide (NOx) emissions in flue gas from boilers, incinerators, furnaces, and other stationary combustion sources; NOxOUT and HERT selective non-catalytic reduction systems; selective catalytic reduction systems comprising ammonia injection grid, and graduated straightening grid systems; I-NOx systems; ESP Processes and Services; ULTRA technology; and flue gas conditioning systems. The FUEL CHEM Technology segment provides programs to improve the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity, and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter, sulfur dioxide, and carbon dioxide through the addition of chemicals into the furnace using TIFI targeted in-furnace injection technology. This segment offers its FUEL CHEM program for plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, and university and district heating markets; and the owners of boilers, furnaces, and other combustion units. Fuel Tech, Inc. was incorporated in 1987 and is headquartered in Warrenville, Illinois.

About Avalon

Avalon Holdings Corporation provides waste management services to industrial, commercial, municipal, and governmental customers in the United States. It operates in Waste Management Services, and Golf and Related Operations segments. The Waste Management Services segment offers hazardous and nonhazardous waste disposal brokerage and management services; captive landfill management services; and turnkey services, including daily operations, facilities management, and management reporting. This segment also engages in the salt water injection well operations; and sale of construction mats. The Golf and Related Operations segment is involved in operation and management of golf courses and related clubhouses and facilities; and a hotel and its associated resort amenities, as well as an athletic center. Its golf and country club facilities offer swimming pools, fitness centers, tennis courts, dining and banquet, conference facilities, salon, and spa services. The company also owns and operates hotel under the brand of The Grand Resort. Avalon Holdings Corporation was incorporated in 1998 and is headquartered in Warren, Ohio.