H2O Innovation (HEOFF) and Kewaunee Scientific (KEQU) Critical Analysis

H2O Innovation (OTCMKTS:HEOFF) and Kewaunee Scientific (NASDAQ:KEQU) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for H2O Innovation and Kewaunee Scientific, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
H2O Innovation 0 0 1 0 3.00
Kewaunee Scientific 0 0 0 0 N/A

Profitability

This table compares H2O Innovation and Kewaunee Scientific’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
H2O Innovation -2.65% -2.77% -1.49%
Kewaunee Scientific 3.28% 14.01% 7.77%

Institutional and Insider Ownership

50.3% of Kewaunee Scientific shares are held by institutional investors. 13.6% of Kewaunee Scientific shares are held by company 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

Kewaunee Scientific pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. H2O Innovation does not pay a dividend. Kewaunee Scientific has raised its dividend for 5 consecutive years.

Valuation & Earnings

This table compares H2O Innovation and Kewaunee Scientific’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
H2O Innovation $78.52 million 0.32 -$2.71 million $0.01 62.93
Kewaunee Scientific $158.05 million 0.48 $5.18 million N/A N/A

Kewaunee Scientific has higher revenue and earnings than H2O Innovation.

Risk & Volatility

H2O Innovation has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Kewaunee Scientific has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500.

Summary

Kewaunee Scientific beats H2O Innovation on 10 of the 12 factors compared between the two stocks.

H2O Innovation Company Profile

H2O Innovation Inc. provides integrated water treatment solutions based on membrane filtration technology in Canada, the United States, Spain, China, the United Arab Emirates, Mexico, France, Egypt, and internationally. It designs, manufactures, and markets systems and equipment for the production of drinking water and industrial process water, reclamation and reuse of water, and desalination of seawater and treatment of wastewater. The company also provides products, as well as membrane filtration systems' spare parts, such as pumps, valves, membranes, filters, media, and other replacement parts of water or wastewater treatment system; and specialty chemicals for membrane pre-treatment applications, as well as develops blends for maintenance, preservation, and cleaning of membrane systems. In addition, it offers specialty coagulants for conventional and membrane filtration systems, as well as flocculants; a line of couplings and fittings for industrial and municipal applications; cartridge filter housings, bag filters, strainers, and cartridge filter elements; and maple syrup products and equipment, such as evaporators, reverse osmosis separators, monitoring solutions, membranes, fittings, tubing, tanks, press filters, and other products related to the maple syrup industry. Further, the company provides operation and maintenance services for water and wastewater treatment systems; and public works services, which include street maintenance, drainage maintenance, and solid waste collection, as well as leases containerized water or wastewater treatment systems, and pilot units. It primarily serves municipalities and local governments; communities and private developments; energy and power plants; food and beverages industries; oil and gas markets; mining and workers camps; and other industrial segments. The company was founded in 2000 and is headquartered in Quebec City, Canada. H2O Innovation Inc. is a subsidiary of Amsterdams Effectenkantoor B.V.

Kewaunee Scientific Company Profile

Kewaunee Scientific Corporation designs, manufactures, and installs laboratory, healthcare, and technical furniture products. The company operates in two segments, Domestic and International. Its products include steel, wood, laminate furniture, fume hoods, biological safety cabinets, laminar flow and ductless hoods, adaptable modular and column systems, moveable workstations and carts, epoxy resin worksurfaces, sinks, and accessories and related design services. The company's laboratory products are used in chemistry, physics, biology, and other general science laboratories in the pharmaceutical, biotechnology, industrial, chemical, commercial, educational, government, and health care markets; technical products are used in facilities manufacturing computers and light electronics and by users of computer and networking furniture; and laminate caseworks that are used in educational, healthcare, and industrial applications. The company sells its products primarily through dealers, commissioned agents, and a national distributor, as well as through competitive bids submitted by the company and its subsidiaries in Singapore, India, and China. Kewaunee Scientific Corporation was founded in 1906 and is headquartered in Statesville, North Carolina.

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