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

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Energy Recovery $55.87 million 5.95 $3.95 million $0.03 206.74
Amtech Systems $152.25 million 0.96 $4.90 million $0.12 91.58

Amtech Systems has higher revenue and earnings than Energy Recovery. 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Energy Recovery 3.07% 2.43% 1.07%
Amtech Systems 1.00% 2.34% 1.18%

Volatility & Risk

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 5 0 3.00
Amtech Systems 0 0 3 0 3.00

Energy Recovery presently has a consensus price target of $18.40, indicating a potential upside of 196.77%. Amtech Systems has a consensus price target of $12.50, indicating a potential upside of 13.74%. Given Energy Recovery’s higher possible upside, equities analysts clearly believe Energy Recovery is more favorable than Amtech Systems.

Insider & Institutional Ownership

33.9% of Energy Recovery shares are owned by institutional investors. Comparatively, 53.0% of Amtech Systems shares are owned by institutional investors. 23.6% of Energy Recovery shares are owned by company insiders. Comparatively, 34.6% of Amtech Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Energy Recovery beats Amtech Systems on 7 of the 13 factors compared between the two stocks.

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.

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.

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