Fuel Tech (NASDAQ: FTEK) and PMFG (NASDAQ:PMFG) are both small-cap industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Fuel Tech has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, PMFG has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Fuel Tech and PMFG, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fuel Tech 0 0 0 0 N/A
PMFG 0 0 0 0 N/A

Profitability

This table compares Fuel Tech and PMFG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fuel Tech -43.05% -21.12% -15.66%
PMFG -17.71% -31.49% -16.26%

Earnings & Valuation

This table compares Fuel Tech and PMFG’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fuel Tech $55.16 million 0.44 -$17.38 million ($0.81) -1.25
PMFG N/A N/A N/A ($1.51) -4.08

PMFG has lower revenue, but higher earnings than Fuel Tech. PMFG is trading at a lower price-to-earnings ratio than Fuel Tech, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

27.8% of Fuel Tech shares are owned by institutional investors. 13.9% of Fuel Tech shares are owned by company 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.

Summary

Fuel Tech beats PMFG on 6 of the 8 factors compared between the two stocks.

About Fuel Tech

Fuel Tech, Inc. is a technology company. The Company is engaged in the development, commercialization and application of technologies for air pollution control, process optimization, combustion efficiency and engineering services. It operates through three segments: Air Pollution Control technology, FUEL CHEM technology and Fuel Conversion. The Air Pollution Control technology segment includes technologies to manage nitrogen oxides (NOx) emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. The FUEL CHEM technology segment uses chemical processes in combination with computational fluid dynamics (CFD) and chemical kinetics modeling (CKM) boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace. The Fuel Conversion segment represents the CARBONITE fuel conversion process and technology.

About PMFG

PMFG, Inc. is a provider of custom-engineered systems and products designed for the delivery of energy. The Company operates in two segments: Process Products and Environmental Systems. The Process Products segment produces specialized systems and products that remove contaminants from gases and liquids, reducing maintenance and extending the life of energy infrastructure. The Process Products segment also includes industrial silencing equipment to control noise pollution on a range of industrial equipment and pulsation dampeners that reduce vibration. The Environmental Systems segment designs, engineers and installs systems for combustion modification, fuel conversions and post-combustion nitrogen oxide (NOX) control for both new and existing sources. The Company’s environmental control systems are used for air pollution abatement and converting burners to accommodate alternative sources of fuel.

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