Investors are evaluating the relative strengths of two small-cap business services companies: Select Water Solutions (NYSE: WTTR) and TOMI Environmental Solutions (NASDAQ: TOMZ). The analysis focuses on various factors, including earnings performance, analyst recommendations, valuation metrics, risk profiles, dividends, institutional ownership, and overall profitability.
Comparative Valuation and Earnings
Both companies present unique financial metrics worth examining. Select Water Solutions has established itself in the water management sector, while TOMI Environmental Solutions specializes in environmental disinfection technologies. A key focus is their gross revenue and earnings per share (EPS), which serve as indicators of their financial health.
The current market consensus suggests a price target of $14.00 for Select Water Solutions, indicating a potential upside of approximately 33.23%. In contrast, TOMI Environmental Solutions has a more aggressive price target of $3.50, reflecting a potential upside of 354.49%. This significant disparity suggests that analysts currently favor TOMI for its growth potential despite its smaller institutional ownership base.
Risk and Profitability Analysis
Risk and volatility are also important factors for investors. Select Water Solutions has a beta of 0.97, indicating it is slightly less volatile than the S&P 500 by 3%. In contrast, TOMI Environmental Solutions exhibits a beta of 1.54, suggesting it is 54% more volatile than the broader market. This higher volatility may appeal to risk-tolerant investors looking for aggressive growth.
Profitability metrics further differentiate the two companies. Select Water Solutions boasts higher net margins and a better return on equity, positioning it as the stronger performer in terms of profitability. However, TOMI’s lower institutional ownership at 4.8% compared to Select’s 81.7% raises questions about long-term growth perceptions among larger investors.
Ownership and Market Sentiment
Institutional investors play a crucial role in the financial health of companies. Select Water Solutions has a robust institutional ownership, with 81.7% of its shares held by large investors. This indicates confidence among major financial players regarding its long-term prospects. On the other hand, TOMI Environmental Solutions shows only 4.8% institutional ownership, although it has a more substantial insider ownership of 23.5%, which may reflect confidence from company executives.
In summary, while Select Water Solutions outperforms TOMI Environmental Solutions in most financial metrics—winning in 11 out of 15 factors—TOMI’s higher potential price target and significant insider ownership could present attractive opportunities for investors willing to accept greater risk.
Company Profiles
Select Water Solutions, headquartered in Houston, Texas, provides essential water management and chemical solutions primarily targeting the energy sector. The company’s operations are divided into three segments: Water Services, Water Infrastructure, and Chemical Technologies. Services include water sourcing, monitoring, and chemical applications in oil and gas, showcasing its critical role in energy production.
Conversely, TOMI Environmental Solutions, based in Frederick, Maryland, specializes in bacteria decontamination and infectious disease control. Its diverse product lineup includes disinfection systems and technologies used across various industries, from healthcare to food processing. TOMI’s extensive applications highlight its relevance in maintaining public health and safety in a range of environments.
As investors weigh their options, the comparative analysis of Select Water Solutions and TOMI Environmental Solutions showcases the complexities of small-cap investments in today’s market.
