Northern Technologies International Corporation (NASDAQ: NTIC) and Fuel Tech (NASDAQ:FTEK) are both small-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitabiliy, analyst recommendations, dividends, earnings, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Northern Technologies International Corporation and Fuel Tech, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northern Technologies International Corporation 0 0 0 0 N/A
Fuel Tech 0 0 0 0 N/A

Volatility & Risk

Northern Technologies International Corporation has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Fuel Tech has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Valuation & Earnings

This table compares Northern Technologies International Corporation and Fuel Tech’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northern Technologies International Corporation $36.65 million 1.96 -$2.08 million $0.04 397.50
Fuel Tech $45.83 million 0.44 -$8.31 million ($0.74) -1.14

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

Profitability

This table compares Northern Technologies International Corporation and Fuel Tech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northern Technologies International Corporation 0.43% 4.33% 3.97%
Fuel Tech -35.70% -23.03% -18.13%

Insider and Institutional Ownership

25.6% of Northern Technologies International Corporation shares are held by institutional investors. Comparatively, 25.0% of Fuel Tech shares are held by institutional investors. 19.0% of Northern Technologies International Corporation shares are held by company insiders. Comparatively, 13.9% of Fuel Tech shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Northern Technologies International Corporation beats Fuel Tech on 9 of the 10 factors compared between the two stocks.

Northern Technologies International Corporation Company Profile

Northern Technologies International Corporation develops and markets environmentally beneficial products and services. The Company’s primary business is corrosion prevention marketed mainly under ZERUST and EXCOR brands (collectively ZERUST). The Company’s segments include ZERUST and Natur-Tec. The Company is engaged in selling its ZERUST products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets. The Company’s ZERUST rust and corrosion inhibiting products include plastic and paper packaging, liquids and coatings, rust removers and cleaners, diffusers and engineered solutions designed specifically for the oil and gas industry. The Company also offers onsite technical consulting for rust and corrosion prevention issues across the world. The Company manufactures and sells a range of bio-based and compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec brand.

Fuel Tech Company Profile

Fuel Tech, Inc. is a technology company. The Company is engaged in the development, commercialization and application of technologies for air pollution control, process optimization, combustion efficiency and engineering services. It operates through three segments: Air Pollution Control technology, FUEL CHEM technology and Fuel Conversion. The Air Pollution Control technology segment includes technologies to manage nitrogen oxides (NOx) emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. The FUEL CHEM technology segment uses chemical processes in combination with computational fluid dynamics (CFD) and chemical kinetics modeling (CKM) boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace. The Fuel Conversion segment represents the CARBONITE fuel conversion process and technology.

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