H&E Equipment Services (NASDAQ: HEES) and Odyssey Marine Exploration (NASDAQ:OMEX) are both small-cap industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Valuation and Earnings

This table compares H&E Equipment Services and Odyssey Marine Exploration’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
H&E Equipment Services $965.22 million 1.20 $137.07 million $1.02 32.29
Odyssey Marine Exploration $4.12 million 7.94 -$8.98 million ($1.11) -3.51

H&E Equipment Services has higher revenue and earnings than Odyssey Marine Exploration. Odyssey Marine Exploration is trading at a lower price-to-earnings ratio than H&E Equipment Services, indicating that it is currently the more affordable of the two stocks.

Dividends

H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Odyssey Marine Exploration does not pay a dividend. H&E Equipment Services pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and price targets for H&E Equipment Services and Odyssey Marine Exploration, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
H&E Equipment Services 0 0 2 0 3.00
Odyssey Marine Exploration 0 0 0 0 N/A

H&E Equipment Services presently has a consensus target price of $31.50, suggesting a potential downside of 4.37%. Given H&E Equipment Services’ higher probable upside, research analysts clearly believe H&E Equipment Services is more favorable than Odyssey Marine Exploration.

Volatility & Risk

H&E Equipment Services has a beta of 2.88, meaning that its stock price is 188% more volatile than the S&P 500. Comparatively, Odyssey Marine Exploration has a beta of 3.24, meaning that its stock price is 224% more volatile than the S&P 500.

Institutional & Insider Ownership

75.2% of H&E Equipment Services shares are owned by institutional investors. Comparatively, 7.8% of Odyssey Marine Exploration shares are owned by institutional investors. 12.0% of H&E Equipment Services shares are owned by company insiders. Comparatively, 8.2% of Odyssey Marine Exploration shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares H&E Equipment Services and Odyssey Marine Exploration’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
H&E Equipment Services 3.69% 38.83% 4.30%
Odyssey Marine Exploration N/A N/A -200.42%

Summary

H&E Equipment Services beats Odyssey Marine Exploration on 11 of the 14 factors compared between the two stocks.

H&E Equipment Services Company Profile

H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.

Odyssey Marine Exploration Company Profile

Odyssey Marine Exploration, Inc. (Odyssey) is a deep-ocean exploration company. The Company’s techniques are applied to mineral exploration, shipwreck cargo recovery, and other marine survey and exploration charter services. The Company is engaged in discovering shipwreck sites in the deep ocean and conducting archaeological excavations with remotely operated vehicles (ROVs). Its shipwreck discoveries include the SS Republic, HMS Victory, Black Swan, La Marquise de Tourny and other unidentified shipwrecks. The Company offers exploration services, including geophysical and geotechnical assessments of seabed mineral deposits to companies, including its subsidiaries and companies, in which it holds an equity position, as a resource development partner. The Company evaluates or explores various types of seabed mineral deposits, such as phosphorites, polymetallic nodules and seafloor massive sulfides. Odyssey offers its marine exploration services to third-party companies.

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