Head-To-Head Comparison: Altra Industrial Motion (AIMC) and Energy Recovery (ERII)

Altra Industrial Motion (NASDAQ: AIMC) and Energy Recovery (NASDAQ:ERII) are both small-cap industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares Altra Industrial Motion and Energy Recovery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altra Industrial Motion 4.92% 16.30% 6.29%
Energy Recovery 7.78% 5.75% 2.60%

Valuation and Earnings

This table compares Altra Industrial Motion and Energy Recovery’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altra Industrial Motion $708.91 million 1.89 $25.14 million $1.41 32.48
Energy Recovery $49.72 million 7.88 $1.03 million $0.06 121.83

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Altra Industrial Motion and Energy Recovery, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altra Industrial Motion 0 3 1 0 2.25
Energy Recovery 0 0 7 0 3.00

Altra Industrial Motion presently has a consensus price target of $48.50, suggesting a potential upside of 5.90%. Energy Recovery has a consensus price target of $16.43, suggesting a potential upside of 124.74%. Given Energy Recovery’s stronger consensus rating and higher possible upside, analysts clearly believe Energy Recovery is more favorable than Altra Industrial Motion.

Institutional & Insider Ownership

99.1% of Altra Industrial Motion shares are owned by institutional investors. Comparatively, 34.3% of Energy Recovery shares are owned by institutional investors. 3.2% of Altra Industrial Motion shares are owned by insiders. Comparatively, 23.6% of Energy Recovery shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Altra Industrial Motion has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, Energy Recovery has a beta of 5.47, suggesting that its stock price is 447% more volatile than the S&P 500.

Dividends

Altra Industrial Motion pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Energy Recovery does not pay a dividend. Altra Industrial Motion pays out 48.2% of its earnings in the form of a dividend.

Summary

Energy Recovery beats Altra Industrial Motion on 9 of the 16 factors compared between the two stocks.

Altra Industrial Motion Company Profile

Altra Industrial Motion Corp. is a designer, producer and marketer of a range of mechanical power transmission (MPT) components. The Company operates through three segments: Couplings, Clutches and Brakes; Electromagnetic Clutches and Brakes, and Gearing. It manufactures a range of couplings suitable for various industrial and specialty applications. The Electromagnetic Clutches and Brakes segment products include brakes and clutches that are used to electronically slow, stop, engage or disengage equipment utilizing electromagnetic friction type connections. The Gearing segment product lines include vertical and horizontal gear drives, speed reducers and increasers, high-speed compressor drives, enclosed custom gear drives, various enclosed gear drive and gear motor configurations, and open gearing products, such as spur, helical, worm and miter/bevel gears. Its products are used to control and transmit power and torque in virtually any industrial application involving movement.

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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