Badger Meter (NYSE: BMI) and Rudolph Technologies (NYSE:RTEC) 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 valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

83.2% of Badger Meter shares are held by institutional investors. Comparatively, 92.6% of Rudolph Technologies shares are held by institutional investors. 4.5% of Badger Meter shares are held by insiders. Comparatively, 2.0% of Rudolph Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Badger Meter and Rudolph Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Badger Meter 0 4 1 0 2.20
Rudolph Technologies 1 0 4 0 2.60

Badger Meter currently has a consensus target price of $48.00, indicating a potential upside of 3.00%. Rudolph Technologies has a consensus target price of $28.00, indicating a potential upside of 19.15%. Given Rudolph Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Rudolph Technologies is more favorable than Badger Meter.

Profitability

This table compares Badger Meter and Rudolph Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Badger Meter 8.39% 12.62% 9.11%
Rudolph Technologies 15.99% 10.49% 9.03%

Dividends

Badger Meter pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Rudolph Technologies does not pay a dividend. Badger Meter pays out 45.6% of its earnings in the form of a dividend. Badger Meter has increased its dividend for 15 consecutive years.

Risk and Volatility

Badger Meter has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Rudolph Technologies has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Earnings & Valuation

This table compares Badger Meter and Rudolph Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Badger Meter $393.76 million 3.45 $32.29 million $1.14 40.88
Rudolph Technologies $232.78 million 3.19 $36.95 million $1.24 18.95

Rudolph Technologies has lower revenue, but higher earnings than Badger Meter. Rudolph Technologies is trading at a lower price-to-earnings ratio than Badger Meter, indicating that it is currently the more affordable of the two stocks.

Summary

Rudolph Technologies beats Badger Meter on 9 of the 17 factors compared between the two stocks.

Badger Meter Company Profile

Badger Meter, Inc. is a manufacturer and marketer of products incorporating flow measurement, control and communication solutions, serving water utilities, municipalities, and commercial and industrial customers around the world. The Company’s products measure water, oil, chemicals and other fluids, provide and communicate timely measurement data. Its product lines include two categories: sales of water meters and related technologies to municipal water utilities (municipal water), and sales of meters to various industries for water and other fluids (flow instrumentation). The municipal water offering includes mechanical and ultrasonic (electronic) water meters and related technologies and services used by water utilities as the basis for generating water and wastewater. The flow instrumentation category includes the sale of meters and valves around the world to measure and control materials flowing through a pipe or pipeline, including air, steam, oil, and other liquids and gases.

Rudolph Technologies Company Profile

Rudolph Technologies, Inc. (Rudolph) is engaged in the design, development, manufacture and support of process control defect inspection and metrology, advanced packaging lithography, and data analysis systems and software used by microelectronics device manufacturers. The Company provides process and yield management solutions used in both wafer processing and final manufacturing through a family of standalone systems for macro-defect inspection, lithography, probe card test and analysis, and transparent and opaque thin film measurements. It offers Process Control Business, Lithography Business and Integrated Software Solutions. Rudolph markets and sells products to logic, memory, data storage, flat panel, application-specific integrated circuit (ASIC) device and packaging manufacturers. Its products include AMX 6000 Series, Explorer Inspection Platform, MetaPULSE System, Wafer Scanner Inspection System, GateWay Software, Yield Optimizer Software and Process Sentinel Software.

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