Amtech Systems (NASDAQ: ASYS) and Energy Recovery (NASDAQ:ERII) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitabiliy, earnings, dividends and risk.

Insider & Institutional Ownership

53.7% of Amtech Systems shares are owned by institutional investors. Comparatively, 31.9% of Energy Recovery shares are owned by institutional investors. 34.6% of Amtech Systems shares are owned by insiders. Comparatively, 23.6% of Energy Recovery 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.

Earnings and Valuation

This table compares Amtech Systems and Energy Recovery’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Amtech Systems $137.83 million 0.90 $744,000.00 ($0.22) -42.91
Energy Recovery $55.87 million 6.30 $3.95 million $0.03 219.07

Energy Recovery has higher revenue, but lower earnings than Amtech Systems. Amtech Systems is trading at a lower price-to-earnings ratio than Energy Recovery, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Amtech Systems has a beta of 2.05, indicating that its share price is 105% more volatile than the S&P 500. Comparatively, Energy Recovery has a beta of 5.51, indicating that its share price is 451% more volatile than the S&P 500.

Profitability

This table compares Amtech Systems and Energy Recovery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amtech Systems -2.16% -4.59% -2.40%
Energy Recovery 3.07% 2.43% 1.07%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Amtech Systems and Energy Recovery, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amtech Systems 0 0 2 0 3.00
Energy Recovery 0 0 5 0 3.00

Amtech Systems currently has a consensus target price of $10.00, indicating a potential upside of 5.93%. Energy Recovery has a consensus target price of $19.00, indicating a potential upside of 189.19%. Given Energy Recovery’s higher possible upside, analysts plainly believe Energy Recovery is more favorable than Amtech Systems.

Summary

Energy Recovery beats Amtech Systems on 9 of the 12 factors compared between the two stocks.

About Amtech Systems

Amtech Systems, Inc. is engaged in the manufacture of capital equipment, including thermal processing, silicon wafer handling automation and related consumables used in fabricating solar cells, Light Emitting Diode (LED) and semiconductor devices. The Company operates through three business segments: solar, semiconductor and polishing. The solar segment supplies thermal processing systems, including diffusion; plasma-enhanced chemical vapor deposition (PECVD); atomic layer deposition (ALD), and related automation, parts and services to the solar/photovoltaic industry. The semiconductor segment supplies thermal processing equipment, including solder reflow equipment and related controls for use by the semiconductor manufacturers and in electronics assembly for automotive and other industries. The polishing supplies segment produces consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates and optical components.

About Energy Recovery

Energy Recovery, Inc. is an energy solutions provider to industrial fluid flow markets. The Company’s solutions convert wasted pressure energy into a reusable asset and preserve or eliminate pumping technology in hostile processing environments. Its segments include Water, Oil & Gas, and Corporate. The Water Segment focuses on products sold for use in reverse osmosis water desalination. The Oil & Gas Segment consists of products sold for use in hydraulic fracturing, gas processing, and chemical processing. The Company offers energy recovery devices (ERDs) in the water desalination market with its pressure exchanger (PX) and turbocharger technologies. The Company offers VorTeq hydraulic fracturing system, IsoBoost, and IsoGen product lines to the oil and gas market. The Company’s customers include engineering, procurement and construction companies, original equipment manufacturers, international oil companies, national oil companies, and exploration and production companies.

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