Head-To-Head Comparison: EnPro Industries (NYSE:NPO) versus Energy Recovery (ERII)

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

Insider & Institutional Ownership

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36.1% of Energy Recovery shares are held by institutional investors. Comparatively, 92.8% of EnPro Industries shares are held by institutional investors. 23.6% of Energy Recovery shares are held by insiders. Comparatively, 2.6% of EnPro Industries shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Energy Recovery and EnPro Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Recovery 22.39% 5.62% 2.65%
EnPro Industries 40.39% 8.02% 2.93%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Energy Recovery and EnPro Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 6 0 3.00
EnPro Industries 0 0 4 0 3.00

Energy Recovery presently has a consensus price target of $15.83, suggesting a potential upside of 91.46%. EnPro Industries has a consensus price target of $101.25, suggesting a potential upside of 31.99%. Given Energy Recovery’s higher probable upside, equities analysts clearly believe Energy Recovery is more favorable than EnPro Industries.

Earnings & Valuation

This table compares Energy Recovery and EnPro Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Recovery $63.16 million 7.07 $12.35 million $0.07 118.14
EnPro Industries $1.31 billion 1.26 $539.80 million $2.30 33.35

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

Dividends

EnPro Industries pays an annual dividend of $0.96 per share and has a dividend yield of 1.3%. Energy Recovery does not pay a dividend. EnPro Industries pays out 41.7% of its earnings in the form of a dividend. EnPro Industries has increased its dividend for 2 consecutive years.

Risk and Volatility

Energy Recovery has a beta of 5.31, suggesting that its share price is 431% more volatile than the S&P 500. Comparatively, EnPro Industries has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Summary

EnPro Industries beats Energy Recovery on 9 of the 16 factors compared between the two stocks.

About Energy Recovery

Energy Recovery, Inc. provides energy solutions to industrial fluid flow markets under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, AT, AquaBold, VorTeq, MTeq, IsoBoost, and IsoGen names worldwide. The company operates through Water and Oil & Gas segments. It offers pressure exchanger energy recovery devices for water desalination plants; hydraulic turbochargers for low-pressure brackish, high-pressure seawater reverse osmosis systems, and other water treatment applications; and high-pressure and circulation pumps for low and high-pressure reverse osmosis systems. The company also provides VorTeq solutions for hydraulic fracturing applications; MTeq solutions for mud pumping applications; IsoBoost systems, such as hydraulic turbo chargers, and related controls and automation systems; and IsoGen systems, including hydraulic turbines, and related controls and automation systems. It serves engineering, procurement, and construction (EPC) firms that design and build large desalination plants; original equipment manufacturers; oil companies; exploration and production companies; oilfield service companies; and EPC firms, which design and build oil and gas processing plants. The company markets its products through its direct sales channels and independent sales agents. Energy Recovery, Inc. was founded in 1992 and is headquartered in San Leandro, California.

About EnPro Industries

EnPro Industries, Inc. is engaged in the designing, developing, manufacturing and marketing engineered industrial products. It operates through three segments. The Sealing Products segment includes three operating divisions: Garlock, which designs, manufactures and sells sealing products; Technetics, which designs, manufactures and sells metal seals and elastomeric seals, among others, and Stemco LP (Stemco), which designs, manufactures and sells heavy-duty truck wheel-end components and systems. The Engineered Products segment includes two industrial products businesses: GGB, which designs, manufactures and sells self-lubricating, non-rolling, metal polymer and engineered plastics, among others, and Compressor Products International, which designs, manufactures, sells and services components. The Power Systems segment includes Fairbanks Morse business, which designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines.

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