Tetra Tech (NASDAQ: TTEK) and Nalco Holding (NYSE:NLC) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Tetra Tech and Nalco Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tetra Tech 4.17% 13.65% 6.73%
Nalco Holding 6.29% 33.10% 5.83%

Insider & Institutional Ownership

85.0% of Tetra Tech shares are held by institutional investors. 3.8% of Tetra Tech shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Tetra Tech pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Nalco Holding does not pay a dividend. Tetra Tech pays out 20.3% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Tetra Tech and Nalco Holding’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tetra Tech $2.03 billion 1.18 $216.70 million $1.97 21.22
Nalco Holding N/A N/A N/A N/A N/A

Tetra Tech has higher revenue and earnings than Nalco Holding.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Tetra Tech and Nalco Holding, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tetra Tech 0 3 4 0 2.57
Nalco Holding 0 0 0 0 N/A

Tetra Tech currently has a consensus price target of $49.57, suggesting a potential upside of 18.59%.

Summary

Tetra Tech beats Nalco Holding on 6 of the 9 factors compared between the two stocks.

About Tetra Tech

Tetra Tech, Inc. is a provider of consulting, engineering, program management, construction management, and technical services. The Company’s segments include Water, Environment and Infrastructure (WEI), Resource Management and Energy (RME), and Remediation and Construction Management (RCM). The WEI segment provides consulting and engineering services. The RME segment provides consulting and engineering services across the world for a range of resource management and energy needs. The Company includes wind-down of its non-core construction activities in the RCM segment. Its solutions span the entire life cycle of consulting and engineering projects and include applied science, research and technology, engineering, design, construction management, operations and maintenance, and information technology. It provides its services to a diverse base of international, the United States commercial, the United Sates federal clients.

About Nalco Holding

Nalco Holding Company provides water, energy, air and process technologies and services. It provides service for water, energy and air through the worldwide manufacture and sale of specialized service chemical programs. This includes production and service related to the sale and application of chemicals and technology used in water treatment, pollution control, energy conservation, oil production and refining, steelmaking, papermaking, mining, and other industrial processes. It has three segments: Water Services, Paper Services and Energy Services. In July 2010, it acquired all of the business assets of Fabrication Technologies, Inc. (FabTech), which is a North American supplier of enhanced oil recovery (EOR) mixing and injection equipment. In April 2010, it purchased the assets of Res-Kem Corp. and General Water Services Corp. In January 2010, Nalco acquired a 50.1% controlling financial interest in Nalco Africa. In December 2011, it merged with Ecolab, Inc.

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