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 $4.1B against $353.2M — 11.6× the size. CECO Environmental Corp. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 23.5×. CECO Environmental Corp. grew revenue faster over the last twelve months: 37.6% against −15.0%. Energy Recovery, Inc. has the higher net margin (12.7% vs −3.39%) and the higher return on invested capital (11.2% vs −0.12%). Across the 20 metrics below, Energy Recovery, Inc. leads on 15 and CECO Environmental Corp. on 5.

Valuation

Metric CECO ERII Pollution & Treatment Controls median
P/E n/m 23.48 —
P/S 3.52 2.91 3.64
P/B 1.53 2.03 2.08
Price to free cash flow n/m 9.08 —
EV/EBITDA 126.99 15.16 17.68
EV/Sales 4.26 2.25 4.26
Earnings yield (0.93%) 4.26% (18.01%)
Free cash flow yield (0.32%) 11.02% (5.86%)

Profitability

Metric CECO ERII Pollution & Treatment Controls median
Gross margin 32.15% 64.01% 34.73%
Operating margin (0.60%) 11.81% (29.01%)
Net margin (3.39%) 12.72% (31.94%)
Free cash flow margin (1.13%) 32.02% (12.20%)
Return on equity (2.57%) 8.58% (38.24%)
Return on assets (1.33%) 7.48% (26.06%)
Return on invested capital (0.12%) 11.20% 0.00%

Growth

Metric CECO ERII Pollution & Treatment Controls median
Revenue growth (TTM) 37.64% (14.95%) 9.79%
EPS growth (last fiscal year) 280.56% 5.00% —
Revenue growth, 5-year CAGR 19.63% 2.56% 8.56%
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 0.03
Current ratio 1.50 8.05 1.90
Net debt to EBITDA 1.36 (2.75) 0.30

Dividend

Metric CECO ERII Pollution & Treatment Controls median
Dividend yield — — —
Payout ratio 0.00 0.00 0.00

Size

Metric CECO ERII Pollution & Treatment Controls median
Market cap 4.10b 353.23m 48.08m

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