Energy Recovery (NASDAQ:ERII) & L.B. Foster (NASDAQ:FSTR) Head-To-Head Contrast

Energy Recovery (NASDAQ:ERII) and L.B. Foster (NASDAQ:FSTR) are both small-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Energy Recovery	12.72%	8.25%	7.24%
L.B. Foster	2.04%	7.61%	4.03%

Earnings and Valuation

This table compares Energy Recovery and L.B. Foster”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Energy Recovery	$134.99 million	2.74	$22.96 million	$0.28	25.61
L.B. Foster	$558.35 million	0.69	$7.55 million	$1.05	34.72

Energy Recovery has higher earnings, but lower revenue than L.B. Foster. Energy Recovery is trading at a lower price-to-earnings ratio than L.B. Foster, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Energy Recovery has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, L.B. Foster has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

83.6% of Energy Recovery shares are owned by institutional investors. Comparatively, 80.6% of L.B. Foster shares are owned by institutional investors. 2.5% of Energy Recovery shares are owned by company insiders. Comparatively, 7.6% of L.B. Foster shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Energy Recovery and L.B. Foster, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Energy Recovery	1	3	0	0	1.75
L.B. Foster	0	3	1	0	2.25

Energy Recovery presently has a consensus target price of $11.67, suggesting a potential upside of 62.72%. L.B. Foster has a consensus target price of $32.00, suggesting a potential downside of 12.23%. Given Energy Recovery’s higher probable upside, equities analysts clearly believe Energy Recovery is more favorable than L.B. Foster.

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 L.B. Foster

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as rack spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for water well applications; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.