Sharps Compliance Corp (NASDAQ: SMED) and Covanta Holding Corporation (NYSE:CVA) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, dividends, risk, valuation, analyst recommendations and institutional ownership.
Profitability
This table compares Sharps Compliance Corp and Covanta Holding Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sharps Compliance Corp | -4.47% | -3.66% | -2.64% |
| Covanta Holding Corporation | -1.41% | -9.22% | -0.95% |
Valuation & Earnings
This table compares Sharps Compliance Corp and Covanta Holding Corporation’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Sharps Compliance Corp | $36.70 million | 2.00 | $497,999.00 | ($0.10) | -45.90 |
| Covanta Holding Corporation | $1.71 billion | 1.10 | $317.00 million | ($0.19) | -75.79 |
Covanta Holding Corporation has higher revenue and earnings than Sharps Compliance Corp. Covanta Holding Corporation is trading at a lower price-to-earnings ratio than Sharps Compliance Corp, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
26.8% of Sharps Compliance Corp shares are held by institutional investors. Comparatively, 90.0% of Covanta Holding Corporation shares are held by institutional investors. 20.3% of Sharps Compliance Corp shares are held by company insiders. Comparatively, 11.6% of Covanta Holding Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Sharps Compliance Corp has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Covanta Holding Corporation has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.
Dividends
Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. Sharps Compliance Corp does not pay a dividend. Covanta Holding Corporation pays out -526.3% of its earnings in the form of a dividend.
Analyst Ratings
This is a summary of recent ratings and price targets for Sharps Compliance Corp and Covanta Holding Corporation, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sharps Compliance Corp | 0 | 1 | 0 | 0 | 2.00 |
| Covanta Holding Corporation | 1 | 3 | 4 | 0 | 2.38 |
Sharps Compliance Corp presently has a consensus target price of $6.00, suggesting a potential upside of 30.72%. Covanta Holding Corporation has a consensus target price of $17.00, suggesting a potential upside of 18.06%. Given Sharps Compliance Corp’s higher possible upside, equities analysts clearly believe Sharps Compliance Corp is more favorable than Covanta Holding Corporation.
Summary
Covanta Holding Corporation beats Sharps Compliance Corp on 10 of the 15 factors compared between the two stocks.
Sharps Compliance Corp Company Profile
Sharps Compliance Corp. is a provider of waste management services, including medical, pharmaceutical and hazardous. The Company’s solutions include Sharps Recovery System, TakeAway Medication Recovery System, MedSafe, Route-Based Pickup Service, TakeAway Recycle System, ComplianceTRAC, Universal Waste Shipback Systems and Other Solutions. The Company’s solutions facilitate the collection, containment, transportation and treatment of various types of healthcare-related materials, including hypodermic needles, lancets and other devices or objects used to puncture or lacerate the skin, or sharps, hazardous waste and unused consumer dispensed medications and over-the-counter drugs. It assists its customers in determining which of its solution offerings fit for the collection, containment, return transportation and treatment of medical waste, used healthcare materials, pharmaceutical waste, hazardous waste and unused dispensed medications. It provides tracking and reporting tools.
Covanta Holding Corporation Company Profile
Covanta Holding Corporation is a holding company. The Company, through its subsidiaries, owns and operates infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The Company operates through North America segment, which consists of waste and energy services operations located primarily in the United States and Canada. Outside of North America, the Company is constructing an energy-from-waste (EfW) facility in Dublin, Ireland. The Company holds interests in an EfW facility in Italy and an infrastructure business in China, which is engaged in EfW operations. These EfW projects generate revenue from three main sources: fees charged for operating projects or processing waste received; the sale of electricity and/or steam, and the sale of ferrous and non-ferrous metals that are recovered from the waste stream as part of the EfW process.
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