Vertex Energy (NASDAQ: VTNR) and Casella Waste Systems (NASDAQ:CWST) are both small-cap industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.

Valuation & Earnings

This table compares Vertex Energy and Casella Waste Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vertex Energy $131.20 million 0.22 $447,203.00 ($0.42) -2.15
Casella Waste Systems $582.75 million 1.21 $112.99 million ($1.40) -11.97

Casella Waste Systems has higher revenue and earnings than Vertex Energy. Casella Waste Systems is trading at a lower price-to-earnings ratio than Vertex Energy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Vertex Energy has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Casella Waste Systems has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Vertex Energy and Casella Waste Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vertex Energy 0 1 0 0 2.00
Casella Waste Systems 0 2 3 0 2.60

Vertex Energy currently has a consensus target price of $1.00, indicating a potential upside of 10.85%. Casella Waste Systems has a consensus target price of $16.60, indicating a potential downside of 0.95%. Given Vertex Energy’s higher possible upside, research analysts clearly believe Vertex Energy is more favorable than Casella Waste Systems.

Institutional & Insider Ownership

16.8% of Vertex Energy shares are held by institutional investors. Comparatively, 77.4% of Casella Waste Systems shares are held by institutional investors. 31.0% of Vertex Energy shares are held by company insiders. Comparatively, 11.5% of Casella Waste Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Vertex Energy and Casella Waste Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vertex Energy -6.49% -23.10% -10.13%
Casella Waste Systems -10.01% -60.26% 3.31%

Summary

Casella Waste Systems beats Vertex Energy on 7 of the 13 factors compared between the two stocks.

Vertex Energy Company Profile

Vertex Energy, Inc. is an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The Company focuses on recycling used motor oil and other petroleum by-products. The Company’s segments include the Black Oil, Refining and Marketing, and Recovery divisions. The Company’s product categories include Used Motor Oil, Fuel Oil, pyrolysis gasoline (Pygas), Gasoline Blendstock and Base Oil. The Black Oil division is engaged in operations across the used motor oil recycling value chain, including collection, aggregation, transportation, storage, refinement and sales of aggregated feedstock and re-refined products to end users. The Refining and Marketing division is engaged in the aggregation of feedstock, re-refining it into end products, and selling these products to customers. The Recovery division is a provider of generator solutions for the recovery and management of hydrocarbon streams.

Casella Waste Systems Company Profile

Casella Waste Systems, Inc. is a solid waste services company. The Company provides resource management services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services. It manages its solid waste operations on a geographic basis through two regional operating segments: Eastern and Western regions, each of which provides a range of solid waste services, and its recycling and commodity brokerage operations through its Recycling segment. Organics services, ancillary operations and industrial services are included in its Other segment. As of January 31, 2017, the Company owned and/or operated 32 solid waste collection operations, 46 transfer stations, 18 recycling facilities, nine Subtitle D landfills, four landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition (C&D) materials.

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