Comparing Babcock (BW) and Hydrogenics Corporation (HYGS)

Babcock (NYSE: BW) and Hydrogenics Corporation (NASDAQ:HYGS) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Volatility & Risk

Babcock has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Hydrogenics Corporation has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Babcock and Hydrogenics Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Babcock 1 2 0 0 1.67
Hydrogenics Corporation 0 1 3 0 2.75

Babcock currently has a consensus price target of $6.35, suggesting a potential upside of 71.62%. Hydrogenics Corporation has a consensus price target of $10.00, suggesting a potential upside of 6.95%. Given Babcock’s higher probable upside, research analysts plainly believe Babcock is more favorable than Hydrogenics Corporation.

Insider and Institutional Ownership

93.8% of Babcock shares are held by institutional investors. Comparatively, 19.2% of Hydrogenics Corporation shares are held by institutional investors. 2.5% of Babcock shares are held by company insiders. Comparatively, 26.1% of Hydrogenics Corporation 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.

Earnings & Valuation

This table compares Babcock and Hydrogenics Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Babcock $1.53 billion 0.12 -$136.65 million ($4.52) -0.82
Hydrogenics Corporation $31.79 million 4.48 -$9.14 million ($0.98) -9.54

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

Profitability

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

Net Margins Return on Equity Return on Assets
Babcock -14.41% -35.95% -12.60%
Hydrogenics Corporation -39.04% -88.76% -21.38%

Summary

Hydrogenics Corporation beats Babcock on 7 of the 13 factors compared between the two stocks.

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.

About Hydrogenics Corporation

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.

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