Investors are weighing the merits of two small-cap service companies: Select Water Solutions (NYSE:WTTR) and TOMI Environmental Solutions (NASDAQ:TOMZ). Both firms operate within the business services sector, yet they cater to distinct markets and possess varied financial profiles. This article evaluates their earnings, valuation, risk factors, institutional ownership, and profitability to determine which stock may offer better investment potential.
Valuation and Earnings Comparison
A direct comparison of Select Water Solutions and TOMI Environmental Solutions highlights notable differences in their earnings and valuation metrics. Select Water Solutions has established a consensus price target of $14.00, indicating a potential upside of 33.23% based on current trading levels. In contrast, TOMI Environmental Solutions boasts a more ambitious price target of $3.50, suggesting a remarkable potential upside of 354.49%.
These figures illustrate a significant disparity in market expectations, with analysts showing greater optimism towards TOMI Environmental Solutions. This perspective may stem from the company’s innovative disinfection technology and its broad application across various sectors, including healthcare and environmental services.
Risk and Volatility Analysis
When assessing risk, Select Water Solutions holds a beta of 0.97, indicating that its stock is approximately 3% less volatile than the broader S&P 500 index. In contrast, TOMI Environmental Solutions exhibits a beta of 1.54, which signifies a 54% increase in volatility compared to the S&P 500. This higher volatility may appeal to investors seeking aggressive growth but also raises the risk profile for potential investors.
Profitability metrics further inform the comparison. Select Water Solutions consistently outperforms TOMI Environmental Solutions in net margins, return on equity, and return on assets, suggesting a more stable financial foundation.
Ownership Trends
Institutional and insider ownership also provide insights into the companies’ respective market positions. Approximately 81.7% of Select Water Solutions’ shares are held by institutional investors, indicating strong confidence from large financial entities about the company’s long-term growth potential. Conversely, TOMI Environmental Solutions shows only 4.8% institutional ownership, though it has a higher insider ownership of 23.5%. This disparity suggests that while insiders have a significant stake in TOMI, larger institutional investors are more inclined toward Select Water Solutions.
Company Profiles
Founded in 2016 and headquartered in Houston, Texas, Select Water Solutions specializes in water management and chemical solutions for the energy sector in the United States. The company operates through three key segments: Water Services, Water Infrastructure, and Chemical Technologies. Their services encompass water sourcing, transfer, monitoring, and various chemical applications in the oil and gas industry.
On the other hand, TOMI Environmental Solutions, based in Frederick, Maryland, has been operational since 1979 and focuses on providing environmental solutions for indoor air and surface disinfection. Their product line includes innovative disinfection technologies utilized across multiple sectors, including healthcare, education, and food processing.
Conclusion
In summary, while Select Water Solutions demonstrates a stronger performance across most financial metrics, TOMI Environmental Solutions offers a potentially higher upside in stock price. The decision for investors may hinge on their risk tolerance and investment strategy. Select Water Solutions presents a more stable investment, while TOMI Environmental Solutions may appeal to those seeking aggressive growth in a burgeoning market for disinfection technologies. Overall, both companies provide unique opportunities for investors to consider based on their individual financial goals and market outlooks.
