Energy Recovery (NASDAQ:ERII – Get Free Report) and Art’s-Way Manufacturing (NASDAQ:ARTW – Get Free Report) are both small-cap industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.
Valuation and Earnings
This table compares Energy Recovery and Art’s-Way Manufacturing”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Energy Recovery | $134.99 million | 3.19 | $22.96 million | $0.28 | 29.82 |
| Art’s-Way Manufacturing | $22.98 million | 0.71 | $1.03 million | ($0.01) | -312.00 |
Insider & Institutional Ownership
83.6% of Energy Recovery shares are held by institutional investors. Comparatively, 2.9% of Art’s-Way Manufacturing shares are held by institutional investors. 2.5% of Energy Recovery shares are held by insiders. Comparatively, 51.5% of Art’s-Way Manufacturing shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Energy Recovery has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Art’s-Way Manufacturing has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.
Profitability
This table compares Energy Recovery and Art’s-Way Manufacturing’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Energy Recovery | 12.72% | 8.25% | 7.24% |
| Art’s-Way Manufacturing | -0.08% | -0.16% | -0.10% |
Analyst Recommendations
This is a summary of current recommendations and price targets for Energy Recovery and Art’s-Way Manufacturing, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Energy Recovery | 1 | 3 | 1 | 0 | 2.00 |
| Art’s-Way Manufacturing | 1 | 0 | 0 | 0 | 1.00 |
Energy Recovery currently has a consensus price target of $13.50, suggesting a potential upside of 61.68%. Given Energy Recovery’s stronger consensus rating and higher probable upside, equities analysts clearly believe Energy Recovery is more favorable than Art’s-Way Manufacturing.
Summary
Energy Recovery beats Art’s-Way Manufacturing on 12 of the 14 factors compared between the two stocks.
About Energy Recovery
Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and sells energy efficiency technology solutions in the Americas, the Middle East, Africa, Asia, and Europe. The company operates through Water and Emerging Technologies segments. The company offers high and low pressure, and ultra pressure exchangers; AT and LPT hydraulic turbochargers; and high-pressure feed and circulation booster pumps for use in seawater and brackish desalination, and wastewater treatment. It also provides PX G1300, which reduces energy consumption and operating costs of carbon dioxide-based refrigeration systems; and spare parts, as well as repair, field, and commissioning services. It sells its products under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, Ultra PX, PX G, PX G1300, PX PowerTrain, AT, and Aquabold brands to original equipment manufacturers, supermarket chains, cold storage facilities, refrigeration system installers, and other industrial users; aftermarket customers consisting of desalination plant owners and operators; and project developers, end-users, and industry consultants, as well as engineering, procurement, and construction firms. Energy Recovery, Inc. was incorporated in 1992 and is headquartered in San Leandro, California.
About Art’s-Way Manufacturing
Art’s-Way Manufacturing Co., Inc. manufactures and distributes farm equipment products. It operates through the Agricultural Products, and Modular Buildings segments. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations, a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes, a line of manure spreaders, sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces and sells modular buildings, which are custom designed to meet the specific research needs of its customers. It also provides services relating to the design, manufacturing, delivery, installation and renting of the building units that it produces. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, IA.
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