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

Risk & Volatility

Energy Recovery has a beta of 5.54, indicating that its share price is 454% more volatile than the S&P 500. Comparatively, Lydall has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Profitability

This table compares Energy Recovery and Lydall’s 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%
Lydall 6.56% 17.43% 9.51%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Energy Recovery and Lydall, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 6 0 3.00
Lydall 0 0 2 0 3.00

Energy Recovery presently has a consensus price target of $16.50, suggesting a potential upside of 105.48%. Lydall has a consensus price target of $62.50, suggesting a potential upside of 7.11%. Given Energy Recovery’s higher possible upside, research analysts clearly believe Energy Recovery is more favorable than Lydall.

Valuation and Earnings

This table compares Energy Recovery and Lydall’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Energy Recovery $55.87 million 7.70 $3.95 million $0.03 267.76
Lydall $640.28 million 1.57 $92.46 million $2.45 23.82

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

Insider and Institutional Ownership

33.7% of Energy Recovery shares are held by institutional investors. Comparatively, 89.1% of Lydall shares are held by institutional investors. 23.6% of Energy Recovery shares are held by insiders. Comparatively, 5.0% of Lydall shares are held 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.

Summary

Lydall beats Energy Recovery on 7 of the 13 factors compared between the two stocks.

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.

Lydall Company Profile

Lydall, Inc. designs and manufactures specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s segments are Performance Materials, Technical Nonwovens, Thermal/Acoustical Metals and Thermal/Acoustical Fibers. The Performance Materials segment includes filtration, thermal insulation and life sciences filtration businesses. The Technical Nonwovens segment includes its industrial filtration and advanced materials products. The Thermal/Acoustical Metals segment includes its metal parts and related tooling used in automotive applications. The Thermal/Acoustical Fibers segment includes its fiber parts business and related tooling used in automotive applications. Its Filtration products include LydAir MG (Micro-Glass) Air Filtration Media, LydAir MB (Melt Blown) Air Filtration Media and Arioso Membrane Composite Media.

Receive News & Ratings for Energy Recovery Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Energy Recovery Inc. and related companies with Analyst Ratings Network's FREE daily email newsletter.