Head to Head Survey: Energy Recovery (ERII) vs. Veeco Instruments (VECO)

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

Insider & Institutional Ownership

38.6% of Energy Recovery shares are held by institutional investors. Comparatively, 99.5% of Veeco Instruments shares are held by institutional investors. 23.6% of Energy Recovery shares are held by insiders. Comparatively, 2.6% of Veeco Instruments shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Energy Recovery and Veeco Instruments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Recovery 22.35% 6.13% 3.08%
Veeco Instruments -11.24% 0.51% 0.31%

Earnings & Valuation

This table compares Energy Recovery and Veeco Instruments’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Recovery $63.16 million 7.71 $12.35 million $0.07 130.00
Veeco Instruments $484.76 million 1.69 -$44.79 million ($0.02) -840.00

Energy Recovery has higher earnings, but lower revenue than Veeco Instruments. Veeco Instruments 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 Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 0 6 0 3.00
Veeco Instruments 0 2 5 0 2.71

Energy Recovery currently has a consensus price target of $15.83, suggesting a potential upside of 73.99%. Veeco Instruments has a consensus price target of $28.67, suggesting a potential upside of 70.63%. Given Energy Recovery’s stronger consensus rating and higher possible upside, equities analysts plainly believe Energy Recovery is more favorable than Veeco Instruments.

Risk & Volatility

Energy Recovery has a beta of 5.33, indicating that its stock price is 433% more volatile than the S&P 500. Comparatively, Veeco Instruments has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Summary

Energy Recovery beats Veeco Instruments on 12 of the 14 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 Veeco Instruments

Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor process equipment worldwide. It offers metal organic chemical vapor deposition systems; packaging lithography equipment; precision surface processing systems; laser annealing systems; ion beam etch and deposition systems; molecular beam epitaxy systems; 3D wafer inspection systems; and atomic layer deposition and other deposition systems. The company sells its products to light emitting diode, micro-electro mechanical system, outsourced semiconductor assembly and test, HDD, and semiconductor manufacturers, as well as research centers and universities. Veeco Instruments Inc. was founded in 1945 and is headquartered in Plainview, New York.

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