Analyzing Energy Recovery (NASDAQ:ERII) & CompoSecure (NASDAQ:CMPO)

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

Earnings and Valuation

This table compares CompoSecure and Energy Recovery”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$160.68 million	8.39	-$53.72 million	($2.16)	-4.94
Energy Recovery	$120.57 million	2.97	$22.96 million	$0.28	24.82

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

Volatility and Risk

CompoSecure has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Energy Recovery has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Institutional and Insider Ownership

37.6% of CompoSecure shares are held by institutional investors. Comparatively, 83.6% of Energy Recovery shares are held by institutional investors. 52.1% of CompoSecure shares are held by insiders. Comparatively, 2.5% of Energy Recovery shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-24.53%	-65.50%	26.83%
Energy Recovery	12.72%	8.25%	7.24%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CompoSecure and Energy Recovery, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	0	5	0	3.00
Energy Recovery	1	3	0	0	1.75

CompoSecure presently has a consensus price target of $26.00, suggesting a potential upside of 143.90%. Energy Recovery has a consensus price target of $11.67, suggesting a potential upside of 67.87%. Given CompoSecure’s stronger consensus rating and higher possible upside, research analysts plainly believe CompoSecure is more favorable than Energy Recovery.

Summary

CompoSecure beats Energy Recovery on 8 of the 14 factors compared between the two stocks.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

About Energy Recovery

Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and sells energy efficiency technology solutions in the Americas, the Middle East, Africa, Asia, and Europe. The company operates through Water and Emerging Technologies segments. The company offers high and low pressure, and ultra pressure exchangers; AT and LPT hydraulic turbochargers; and high-pressure feed and circulation booster pumps for use in seawater and brackish desalination, and wastewater treatment. It also provides PX G1300, which reduces energy consumption and operating costs of carbon dioxide-based refrigeration systems; and spare parts, as well as repair, field, and commissioning services. It sells its products under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, Ultra PX, PX G, PX G1300, PX PowerTrain, AT, and Aquabold brands to original equipment manufacturers, supermarket chains, cold storage facilities, refrigeration system installers, and other industrial users; aftermarket customers consisting of desalination plant owners and operators; and project developers, end-users, and industry consultants, as well as engineering, procurement, and construction firms. Energy Recovery, Inc. was incorporated in 1992 and is headquartered in San Leandro, California.