Rudolph Technologies (NYSE: RTEC) and Badger Meter (NYSE:BMI) are both small-cap testing & measuring equipment companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Rudolph Technologies and Badger Meter, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rudolph Technologies 1 0 4 0 2.60
Badger Meter 0 4 1 0 2.20

Rudolph Technologies presently has a consensus target price of $28.00, suggesting a potential upside of 8.32%. Badger Meter has a consensus target price of $48.00, suggesting a potential upside of 9.71%. Given Badger Meter’s higher possible upside, analysts clearly believe Badger Meter is more favorable than Rudolph Technologies.

Dividends

Badger Meter pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. Rudolph Technologies does not pay a dividend. Badger Meter pays out 45.6% of its earnings in the form of a dividend. Rudolph Technologies has increased its dividend for 15 consecutive years.

Risk and Volatility

Rudolph Technologies has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Badger Meter has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Rudolph Technologies and Badger Meter’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rudolph Technologies 15.99% 10.49% 9.03%
Badger Meter 8.39% 12.62% 9.11%

Institutional and Insider Ownership

92.3% of Rudolph Technologies shares are owned by institutional investors. Comparatively, 83.9% of Badger Meter shares are owned by institutional investors. 2.0% of Rudolph Technologies shares are owned by insiders. Comparatively, 4.5% of Badger Meter shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Rudolph Technologies and Badger Meter’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Rudolph Technologies $232.78 million 3.51 $36.95 million $1.24 20.85
Badger Meter $393.76 million 3.23 $32.29 million $1.14 38.38

Rudolph Technologies has higher revenue, but lower earnings than Badger Meter. Rudolph Technologies is trading at a lower price-to-earnings ratio than Badger Meter, indicating that it is currently the more affordable of the two stocks.

Summary

Rudolph Technologies beats Badger Meter on 10 of the 17 factors compared between the two stocks.

About Rudolph Technologies

Rudolph Technologies, Inc. (Rudolph) is engaged in the design, development, manufacture and support of process control defect inspection and metrology, advanced packaging lithography, and data analysis systems and software used by microelectronics device manufacturers. The Company provides process and yield management solutions used in both wafer processing and final manufacturing through a family of standalone systems for macro-defect inspection, lithography, probe card test and analysis, and transparent and opaque thin film measurements. It offers Process Control Business, Lithography Business and Integrated Software Solutions. Rudolph markets and sells products to logic, memory, data storage, flat panel, application-specific integrated circuit (ASIC) device and packaging manufacturers. Its products include AMX 6000 Series, Explorer Inspection Platform, MetaPULSE System, Wafer Scanner Inspection System, GateWay Software, Yield Optimizer Software and Process Sentinel Software.

About Badger Meter

Badger Meter, Inc. is a manufacturer and marketer of products incorporating flow measurement, control and communication solutions, serving water utilities, municipalities, and commercial and industrial customers around the world. The Company’s products measure water, oil, chemicals and other fluids, provide and communicate timely measurement data. Its product lines include two categories: sales of water meters and related technologies to municipal water utilities (municipal water), and sales of meters to various industries for water and other fluids (flow instrumentation). The municipal water offering includes mechanical and ultrasonic (electronic) water meters and related technologies and services used by water utilities as the basis for generating water and wastewater. The flow instrumentation category includes the sale of meters and valves around the world to measure and control materials flowing through a pipe or pipeline, including air, steam, oil, and other liquids and gases.

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