CECO Environmental Corp. (CECO) vs Energy Recovery, Inc. (ERII)

CECO Environmental Corp. and Energy Recovery, Inc. are both Pollution & Treatment Controls companies. CECO Environmental Corp. is the larger, with a market value of $2.2B against $342.5M — 6.5× the size. CECO Environmental Corp. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 66.7×. CECO Environmental Corp. grew revenue faster over the last twelve months: 37.6% against −26.2%. Energy Recovery, Inc. has the higher net margin (5.15% vs −3.39%) and the higher return on invested capital (0.59% vs −0.12%). Across the 20 metrics below, Energy Recovery, Inc. leads on 13 and CECO Environmental Corp. on 7.

Valuation

Metric CECO ERII Pollution & Treatment Controls median
P/E n/m 66.70 —
P/S 1.80 3.41 2.50
P/B 0.78 2.07 3.39
Price to free cash flow n/m 10.48 —
EV/EBITDA 75.47 15.10 18.45
EV/Sales 2.53 2.71 2.74
Earnings yield (1.82%) 1.50% (14.48%)
Free cash flow yield (0.63%) 9.55% (11.96%)

Profitability

Metric CECO ERII Pollution & Treatment Controls median
Gross margin 32.15% 60.96% 32.15%
Operating margin (0.60%) 0.78% (17.50%)
Net margin (3.39%) 5.15% (17.98%)
Free cash flow margin (1.13%) 35.25% (10.60%)
Return on equity (2.57%) 2.97% (36.99%)
Return on assets (1.33%) 2.56% (24.89%)
Return on invested capital (0.12%) 0.59% (0.06%)

Growth

Metric CECO ERII Pollution & Treatment Controls median
Revenue growth (TTM) 37.64% (26.20%) 8.69%
EPS growth (last fiscal year) 280.56% 5.00% 11.29%
Revenue growth, 5-year CAGR 19.63% 2.56% 12.30%
Net income growth, 5-year CAGR 43.55% (2.74%) 0.00%

Health

Metric CECO ERII Pollution & Treatment Controls median
Debt to equity 0.35 0.00 0.07
Current ratio 1.50 7.22 1.84
Net debt to EBITDA 1.36 (2.75) 0.50

Dividend

Metric CECO ERII Pollution & Treatment Controls median
Dividend yield — — —
Payout ratio — — —

Size

Metric CECO ERII Pollution & Treatment Controls median
Market cap 2.21b 342.51m 62.87m

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