Energy Recovery (NASDAQ: ERII) is one of 18 publicly-traded companies in the “Industrial Machinery” industry, but how does it compare to its peers? We will compare Energy Recovery to related businesses based on the strength of its profitability, valuation, earnings, analyst recommendations, institutional ownership, dividends and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Energy Recovery and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 7 0 3.00
Energy Recovery Competitors 46 297 298 8 2.41

Energy Recovery presently has a consensus target price of $16.57, indicating a potential upside of 102.83%. As a group, “Industrial Machinery” companies have a potential upside of 3.86%. Given Energy Recovery’s stronger consensus rating and higher probable upside, research analysts clearly believe Energy Recovery is more favorable than its peers.

Profitability

This table compares Energy Recovery and its peers’ 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%
Energy Recovery Competitors -23.98% 10.38% 4.27%

Insider and Institutional Ownership

33.8% of Energy Recovery shares are owned by institutional investors. Comparatively, 63.3% of shares of all “Industrial Machinery” companies are owned by institutional investors. 23.6% of Energy Recovery shares are owned by insiders. Comparatively, 12.1% of shares of all “Industrial Machinery” companies are owned by 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.

Earnings & Valuation

This table compares Energy Recovery and its peers revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Energy Recovery $55.87 million $3.95 million 272.42
Energy Recovery Competitors $696.15 million $107.93 million 49.92

Energy Recovery’s peers have higher revenue and earnings than Energy Recovery. Energy Recovery is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Energy Recovery has a beta of 5.55, indicating that its stock price is 455% more volatile than the S&P 500. Comparatively, Energy Recovery’s peers have a beta of 1.52, indicating that their average stock price is 52% more volatile than the S&P 500.

Summary

Energy Recovery beats its peers on 7 of the 13 factors compared.

Energy Recovery Company Profile

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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