Critical Survey: Energy Recovery (NASDAQ:ERII) versus OriginClear (OTCMKTS:OCLN)

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

Earnings & Valuation

This table compares Energy Recovery and OriginClear”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Energy Recovery	$135.06 million	6.46	$21.50 million	$0.34	44.29
OriginClear	$30,000.00	145.65	-$11.63 million	N/A	N/A

Energy Recovery has higher revenue and earnings than OriginClear.

Volatility and Risk

Energy Recovery has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, OriginClear has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Energy Recovery	14.35%	8.90%	7.84%
OriginClear	-998.01%	N/A	-11.62%

Analyst Recommendations

This is a summary of recent ratings and price targets for Energy Recovery and OriginClear, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Energy Recovery	0	1	3	2	3.17
OriginClear	0	0	0	0	0.00

Energy Recovery presently has a consensus price target of $20.75, suggesting a potential upside of 37.78%. Given Energy Recovery’s stronger consensus rating and higher probable upside, equities analysts plainly believe Energy Recovery is more favorable than OriginClear.

Insider & Institutional Ownership

83.6% of Energy Recovery shares are owned by institutional investors. 4.1% of Energy Recovery shares are owned by company insiders. Comparatively, 0.4% of OriginClear shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Energy Recovery beats OriginClear on 12 of the 13 factors compared between the two stocks.

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.

About OriginClear

OriginClear, Inc. provides water treatment solutions worldwide. The company designs and manufactures a line of water treatment systems for municipal, industrial, and pure water applications. It also offers a range of services, including maintenance contracts, retrofits, and replacement assistance; and rents equipment through contracts of varying duration, as well as provides prefabricated water transport and treatment systems. The company was formerly known as OriginOil, Inc. and changed its name to OriginClear, Inc. in April 2015. OriginClear, Inc. was incorporated in 2007 and is headquartered in Clearwater, Florida.