Energy Recovery (NASDAQ:ERII) and SUMITOMO HEAVY/ADR (OTCMKTS:SOHVY) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Risk & Volatility

Energy Recovery has a beta of 5.62, indicating that its share price is 462% more volatile than the S&P 500. Comparatively, SUMITOMO HEAVY/ADR has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500.

Profitability

This table compares Energy Recovery and SUMITOMO HEAVY/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Recovery 46.91% 10.72% 5.77%
SUMITOMO HEAVY/ADR N/A N/A N/A

Analyst Recommendations

This is a breakdown of current ratings and price targets for Energy Recovery and SUMITOMO HEAVY/ADR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 4 0 3.00
SUMITOMO HEAVY/ADR 0 0 0 0 N/A

Energy Recovery currently has a consensus price target of $16.00, suggesting a potential upside of 104.87%. Given Energy Recovery’s higher probable upside, research analysts clearly believe Energy Recovery is more favorable than SUMITOMO HEAVY/ADR.

Valuation & Earnings

This table compares Energy Recovery and SUMITOMO HEAVY/ADR’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Recovery $63.16 million 6.63 $12.35 million $0.07 111.57
SUMITOMO HEAVY/ADR $7.14 billion 0.55 $324.47 million $0.66 12.17

SUMITOMO HEAVY/ADR has higher revenue and earnings than Energy Recovery. SUMITOMO HEAVY/ADR is trading at a lower price-to-earnings ratio than Energy Recovery, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

37.1% of Energy Recovery shares are held by institutional investors. 23.8% of Energy Recovery shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

SUMITOMO HEAVY/ADR pays an annual dividend of $0.07 per share and has a dividend yield of 0.9%. Energy Recovery does not pay a dividend. SUMITOMO HEAVY/ADR pays out 10.6% of its earnings in the form of a dividend.

Summary

Energy Recovery beats SUMITOMO HEAVY/ADR on 11 of the 15 factors compared between the two stocks.

Energy Recovery Company Profile

Energy Recovery, Inc. provides energy solutions to industrial fluid flow markets under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, AT, AquaBold, VorTeq, MTeq, IsoBoost, and IsoGen names worldwide. The company operates through Water and Oil & Gas segments. It offers pressure exchanger energy recovery devices for water desalination plants; hydraulic turbochargers for low-pressure brackish, high-pressure seawater reverse osmosis systems, and other water treatment applications; and high-pressure and circulation pumps for low and high-pressure reverse osmosis systems. The company also provides VorTeq solutions for hydraulic fracturing applications; MTeq solutions for mud pumping applications; IsoBoost systems, such as hydraulic turbo chargers, and related controls and automation systems; and IsoGen systems, including hydraulic turbines, and related controls and automation systems. It serves engineering, procurement, and construction (EPC) firms that design and build large desalination plants; original equipment manufacturers; oil companies; exploration and production companies; oilfield service companies; and EPC firms, which design and build oil and gas processing plants. The company markets its products through its direct sales channels and independent sales agents. Energy Recovery, Inc. was founded in 1992 and is headquartered in San Leandro, California.

SUMITOMO HEAVY/ADR Company Profile

Sumitomo Heavy Industries, Ltd. develops, manufactures, and sells general machinery, advanced precision machinery, construction machinery, ships, and environmental plant facilities in Asia, Europe, and the United States. Its Machinery Components segment offers power transmission and control equipment, including drives, compact gear motors, motion control drives, and gearboxes. The company's Precision Machinery segment provides injection molding machines, transfer molding presses, cryocoolers, cryopumps, precision positioning equipment, laser annealing machines, laser drills, control systems, motion components, ion implanters, rolls for metal rolling, surface grinding machines, coolant systems, and extrusion coating lines for smartphone and semiconductor manufacturing industries. Its Construction Machinery segment offers hydraulic excavators and road machinery. The company's Industrial Machinery offers cyclotrons for positron emission tomography, positron emission tomography tracer production systems, proton therapy systems, vacuum coating equipment, forging presses, lifting magnets, steam turbines, process pumps, material handling systems, logistics systems, parking systems, non-destructive inspections, and forklifts. Its Ships segment provides oil tankers. The company's Environmental Facilities & Plants segment offers circulating fluidized bed boilers, rotary kiln-type recycling facilities, electrostatic precipitators, evaporation and crystallization facilities, spinning machines, clean room systems, dust collectors, distillation and extraction plants, reactor vessels, mixing vessels, industrial waste water treatment facilities, water and sewage treatment systems, and food and beverage manufacturing facilities. Its Others segment provides IT solutions and security services. The company was founded in 1888 and is headquartered in Tokyo, Japan.

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