Hydrogenics (NASDAQ: HYGS) and NL Industries (NYSE:NL) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent recommendations for Hydrogenics and NL Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hydrogenics 0 1 2 0 2.67
NL Industries 0 1 0 0 2.00

Hydrogenics presently has a consensus target price of $10.00, indicating a potential upside of 35.14%. NL Industries has a consensus target price of $14.00, indicating a potential upside of 61.85%. Given NL Industries’ higher possible upside, analysts clearly believe NL Industries is more favorable than Hydrogenics.

Risk and Volatility

Hydrogenics has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, NL Industries has a beta of 3.03, indicating that its share price is 203% more volatile than the S&P 500.

Profitability

This table compares Hydrogenics and NL Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hydrogenics -22.86% -47.24% -15.76%
NL Industries 110.31% 27.35% 16.37%

Insider and Institutional Ownership

24.0% of Hydrogenics shares are held by institutional investors. Comparatively, 10.7% of NL Industries shares are held by institutional investors. 26.1% of Hydrogenics shares are held by insiders. Comparatively, 0.1% of NL Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Hydrogenics and NL Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hydrogenics $48.05 million 2.44 -$11.14 million ($0.80) -9.50
NL Industries $112.00 million 3.76 $116.10 million N/A N/A

NL Industries has higher revenue and earnings than Hydrogenics.

Summary

NL Industries beats Hydrogenics on 9 of the 13 factors compared between the two stocks.

About Hydrogenics

Hydrogenics Corporation, together with its subsidiaries, designs, develops, and manufactures hydrogen generation products based on water electrolysis technology; and fuel cell products based on proton exchange membrane technology. It operates in two segments, OnSite Generation and Power Systems. The OnSite Generation segment develops products for industrial gas, hydrogen fueling, and renewable energy storage markets. It offers HySTAT Hydrogen Stations that supply on-site hydrogen for various hydrogen applications, including vehicle fueling, distributed power, and various industrial processes; and provides spare parts and services. This segment sells its products to original equipment manufacturers (OEMs), merchant gas companies, end users, and oil and gas companies, as well as to electric power utilities. The Power Systems segment develops products for energy storage, stationary, and motive power applications. This segment offers HyPM fuel cell products comprising HyPM fuel cell power modules that produce direct current (DC) power in standard outputs of 2.5, 5, 8, 12, 16, 30, 90, 120, and 200 kW; and HyPX Fuel Cell Power Pack, which includes a standard HyPM power module integrated with hydrogen storage tanks and ultracapacitors to provide higher power in short bursts. Its HyPM fuel cell products also consist of integrated fuel cell systems that are used for portable and stationary applications, including portable and auxiliary power units for military applications, and DC or DC backup power system for cellular tower sites, as well as provides engineering development services for new or custom products. This segment sells its products primarily to OEMs and other integrators, as well as to military, aerospace, and other early adopters of emerging technologies. The company markets its products through direct sales force and a network of distributors worldwide. Hydrogenics Corporation was founded in 1988 and is headquartered in Mississauga, Canada.

About NL Industries

NL Industries, Inc., through its subsidiary, CompX International Inc., operates in the component products industry in the United States and internationally. The company manufactures and sells mechanical and electronic cabinet locks, and other locking mechanisms, including disc tumbler locks, pin tumbler locking mechanisms, and CompX eLock and Stealthlock electronic locks for use in various applications, such as ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and gaming machines, high security medical cabinetry, electronic circuit panels, storage compartments, and gas station security. It also offers original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers, and other exhaust components; gauges, such as GPS speedometers and tachometers; mechanical and electronic controls and throttles; steering wheels and other billet aluminum accessories; and dash panels, LED lighting products, wire harnesses, and other accessories primarily for performance and ski/wakeboard boats. In addition, it offers insurance brokerage and risk management services. The company sells its component products directly to original equipment manufacturers, as well as through distributors. NL Industries, Inc. was founded in 1891 and is based in Dallas, Texas. NL Industries, Inc. is a subsidiary of Valhi, Inc.

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