SmartHeat (OTCMKTS:HEAT) and Babcock & Wilcox Enterprises (NYSE:BW) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.
Institutional and Insider Ownership
63.8% of Babcock & Wilcox Enterprises shares are held by institutional investors. 2.2% of SmartHeat shares are held by insiders. Comparatively, 3.6% of Babcock & Wilcox Enterprises shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of recent ratings for SmartHeat and Babcock & Wilcox Enterprises, as reported by MarketBeat.com.
Babcock & Wilcox Enterprises has a consensus price target of $3.50, suggesting a potential upside of 306.98%. Given Babcock & Wilcox Enterprises’ higher probable upside, analysts clearly believe Babcock & Wilcox Enterprises is more favorable than SmartHeat.
Valuation and Earnings
This table compares SmartHeat and Babcock & Wilcox Enterprises’ revenue, earnings per share (EPS) and valuation.
SmartHeat has higher earnings, but lower revenue than Babcock & Wilcox Enterprises.
Volatility and Risk
SmartHeat has a beta of 3.38, meaning that its stock price is 238% more volatile than the S&P 500. Comparatively, Babcock & Wilcox Enterprises has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.
This table compares SmartHeat and Babcock & Wilcox Enterprises’ net margins, return on equity and return on assets.
SmartHeat Company Profile
SmartHeat Inc. does not have significant operations. It intends to seek potential assets, property, or businesses to acquire, in a business combination, by reorganization, merger, or acquisition. Previously, it was engaged in the manufacture and sale of heat pumps for commercial and residential applications. The company was formerly known as Pacific Goldrim Resources, Inc. and changed its name to SmartHeat Inc. in April 2008. SmartHeat Inc. was incorporated in 2006 and is headquartered in Shenyang, China.
Babcock & Wilcox Enterprises Company Profile
Babcock & Wilcox Enterprises, Inc. provides fossil and renewable power generation and environmental equipment for the power and industrial markets worldwide. Its Power segment offers boiler cleaning and material handling equipment; and supercritical, subcritical, fluidized bed, chemical recovery, industrial power, package, and waste heat boilers, as well as heat recovery steam generators. It also provides air pollution control products and related equipment, such as wet and dry flue gas desulfurization systems, catalytic and non-catalytic nitrogen oxides reduction systems, low nitrogen oxides burners and overfire air systems, fabric filter baghouses, wet and dry electrostatic precipitators, mercury control systems, and dry sorbent injection for acid gas mitigation. In addition, this segment also offers replacement parts, retrofit and upgrade projects, fuel switching and repowering projects, and training programs; and field technical, construction and maintenance, start-up and commissioning, and plant operations and maintenance services. The company's Renewable segment provides steam-generating systems; environmental and auxiliary equipment for the waste-to-energy and biomass power generation industries; and plant operations and maintenance services. Its Industrial segment offers oxidizers, solvent recovery and distillation systems, wet electrostatic precipitators, scrubbers, and heat recovery systems; and specialized industrial process systems, coating lines, and equipment. This segment also provides air-cooled (dry) cooling systems, mechanical draft wet cooling towers, and natural draft wet cooling hyperbolic towers; end-to-end aftermarket services, such as spare parts, upgrades and revamping of existing installations, and remote monitoring; and gas turbine inlet and exhaust systems, custom silencers, and filters and enclosures. The company was founded in 1867 and is headquartered in Charlotte, North Carolina.