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

Analyst Recommendations

This is a summary of current recommendations and price targets for Energy Recovery and Greystone Logistics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Recovery 0 1 2 0 2.67
Greystone Logistics 0 0 0 0 N/A

Energy Recovery currently has a consensus target price of $16.50, suggesting a potential upside of 114.84%. Given Energy Recovery’s higher possible upside, equities analysts plainly believe Energy Recovery is more favorable than Greystone Logistics.

Profitability

This table compares Energy Recovery and Greystone Logistics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Recovery 48.60% 12.63% 7.24%
Greystone Logistics 3.62% 98.98% 6.35%

Risk & Volatility

Energy Recovery has a beta of 5.1, indicating that its stock price is 410% more volatile than the S&P 500. Comparatively, Greystone Logistics has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares Energy Recovery and Greystone Logistics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Recovery $63.16 million 6.55 $12.35 million $0.07 109.71
Greystone Logistics $48.61 million 0.34 $1.62 million N/A N/A

Energy Recovery has higher revenue and earnings than Greystone Logistics.

Insider and Institutional Ownership

33.8% of Energy Recovery shares are held by institutional investors. 23.8% of Energy Recovery shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Energy Recovery beats Greystone Logistics on 11 of the 12 factors compared between the two stocks.

Energy Recovery Company Profile

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.

Greystone Logistics Company Profile

Greystone Logistics, Inc., through its subsidiaries, manufactures and markets plastic pallets and pelletized recycled plastic resin. It offers rackable, can, nestable, display, monoblock, half-barrel and slim keg stackable, drum, and mid duty pallets. The company also offers tolling services. It sells its pallets directly, as well as through a network of independent contractor distributors. The company was formerly known as PalWeb Corporation and changed its name to Greystone Logistics, Inc. in March 2005. Greystone Logistics, Inc. was founded in 1969 and is based in Tulsa, Oklahoma.

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