Energy Recovery, Inc. (ERII) vs Fuel Tech, Inc. (FTEK)

Energy Recovery, Inc. and Fuel Tech, Inc. are both Pollution & Treatment Controls companies. Energy Recovery, Inc. is the larger, with a market value of $353.2M against $53.5M — 6.6× the size. Fuel Tech, Inc. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 23.5×. Fuel Tech, Inc. grew revenue faster over the last twelve months: 8.89% against −15.0%. Energy Recovery, Inc. has the higher net margin (12.7% vs −12.8%) and the higher return on invested capital (11.2% vs −16.1%). Across the 18 metrics below, Energy Recovery, Inc. leads on 12 and Fuel Tech, Inc. on 6.

Valuation

Metric ERII FTEK Pollution & Treatment Controls median
P/E 23.48 n/m —
P/S 2.91 1.96 3.64
P/B 2.03 1.44 2.08
Price to free cash flow 9.08 n/m —
EV/EBITDA 15.16 n/m 17.68
EV/Sales 2.25 1.27 4.26
Earnings yield 4.26% (6.40%) (18.01%)
Free cash flow yield 11.02% (2.21%) (5.86%)

Profitability

Metric ERII FTEK Pollution & Treatment Controls median
Gross margin 64.01% 44.74% 34.73%
Operating margin 11.81% (16.78%) (29.01%)
Net margin 12.72% (12.75%) (31.94%)
Free cash flow margin 32.02% (4.34%) (12.20%)
Return on equity 8.58% (8.92%) (38.24%)
Return on assets 7.48% (7.72%) (26.06%)
Return on invested capital 11.20% (16.13%) 0.00%

Growth

Metric ERII FTEK Pollution & Treatment Controls median
Revenue growth (TTM) (14.95%) 8.89% 9.79%
EPS growth (last fiscal year) 5.00% (33.33%) —
Revenue growth, 5-year CAGR 2.56% 3.42% 8.56%
Net income growth, 5-year CAGR (2.74%) 0.00% 0.00%

Health

Metric ERII FTEK Pollution & Treatment Controls median
Debt to equity 0.00 0.00 0.03
Current ratio 8.05 5.10 1.90
Net debt to EBITDA (2.75) 8.34 0.30

Dividend

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

Size

Metric ERII FTEK Pollution & Treatment Controls median
Market cap 353.23m 53.54m 48.08m

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