Hydrogenics (NASDAQ: HYGSD) and Babcock (NYSE:BW) are both small-cap heavy electrical equipment – nec companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Hydrogenics and Babcock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hydrogenics -76.69% -144.08% -35.99%
Babcock -14.41% -35.95% -12.60%

Risk and Volatility

Hydrogenics has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Babcock has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares Hydrogenics and Babcock’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Hydrogenics N/A N/A N/A ($0.98) -10.46
Babcock $1.58 billion 0.12 -$115.64 million ($4.52) -0.89

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

Insider & Institutional Ownership

91.8% of Babcock shares are held by institutional investors. 2.5% of Babcock 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.

Analyst Ratings

This is a summary of current ratings for Hydrogenics and Babcock, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hydrogenics 0 0 0 0 N/A
Babcock 1 3 0 0 1.75

Babcock has a consensus price target of $6.35, indicating a potential upside of 57.96%. Given Babcock’s higher probable upside, analysts plainly believe Babcock is more favorable than Hydrogenics.

Summary

Babcock beats Hydrogenics on 8 of the 9 factors compared between the two stocks.

About Hydrogenics

Hydrogenics Corp is a Canada-based firm, which designs and manufactures hydrogen generation products based on water electrolysis technology, and fuel cell products based on proton exchange membrane (PEM) technology. The Company’s segments are Onsite Generation and Power Systems. The OnSite Generation segment is based in Oevel, Belgium and develops products for industrial gas, hydrogen fueling and renewable energy storage markets. The Power business segment is based in Mississauga, Canada, with a satellite facility in Gladbeck, Germany. The Company’s products include HySTAT hydrogen generation equipment and HyPM fuel cell products. It has facilities in Mississauga, Ontario, Canada; Oevel-Westerlo, Belgium, and Gladbeck, Germany. It also has sales and service offices in Eastern Europe and North America. The Company has operations in Belgium, Canada and Germany with satellite offices in the United States and branch offices in Russia and Indonesia. Its products are sold around the world.

About Babcock

Babcock & Wilcox Enterprises, Inc. is a technology-based provider of fossil and renewable power generation and environmental equipment that includes a suite of boiler products and environmental systems, and services for power and industrial uses. The Company operates in three segments: Power, Renewable and Industrial. Through its Power segment, the Company provides the supply of and aftermarket services for steam-generating, environmental, and auxiliary equipment for power generation and other industrial applications. The 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 for its systems and equipment. The Industrial segment focuses on custom-engineered cooling, environmental, noise abatement and industrial equipment along with related aftermarket services.

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