Healthcare Services Group (NASDAQ:HCSG) versus Fuel Tech (NASDAQ:FTEK) Head to Head Review

Fuel Tech (NASDAQ:FTEK) and Healthcare Services Group (NASDAQ:HCSG) are both small-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Fuel Tech and Healthcare Services Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fuel Tech	1	1	0	0	1.50
Healthcare Services Group	0	3	5	0	2.62

Healthcare Services Group has a consensus target price of $26.20, suggesting a potential upside of 12.45%. Given Healthcare Services Group’s stronger consensus rating and higher possible upside, analysts plainly believe Healthcare Services Group is more favorable than Fuel Tech.

Insider and Institutional Ownership

20.9% of Fuel Tech shares are owned by institutional investors. Comparatively, 98.0% of Healthcare Services Group shares are owned by institutional investors. 9.8% of Fuel Tech shares are owned by company insiders. Comparatively, 2.9% of Healthcare Services Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Fuel Tech has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Healthcare Services Group has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares Fuel Tech and Healthcare Services Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fuel Tech	-11.15%	-7.34%	-6.30%
Healthcare Services Group	6.59%	18.97%	11.96%

Valuation & Earnings

This table compares Fuel Tech and Healthcare Services Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fuel Tech	$26.38 million	1.67	-$2.32 million	($0.09)	-15.67
Healthcare Services Group	$1.84 billion	0.87	$59.06 million	$1.72	13.55

Healthcare Services Group has higher revenue and earnings than Fuel Tech. Fuel Tech is trading at a lower price-to-earnings ratio than Healthcare Services Group, indicating that it is currently the more affordable of the two stocks.

Summary

Healthcare Services Group beats Fuel Tech on 11 of the 14 factors compared between the two stocks.

About Fuel Tech

Fuel Tech, Inc. provides boiler optimization, efficiency improvement, and air pollution reduction and control solutions to utility and industrial customers worldwide. The company operates through Air Pollution Control Technology and FUEL CHEM Technology segments. The Air Pollution Control Technology segment offers technologies to reduce nitrogen oxide (NOx) emissions in flue gas from boilers, incinerators, furnaces, and other stationary combustion sources; NOxOUT and HERT selective non-catalytic reduction systems; selective catalytic reduction systems comprising ammonia injection grid, and graduated straightening grid systems; I-NOx systems; ESP Processes and Services; ULTRA technology; and flue gas conditioning systems. The FUEL CHEM Technology segment provides programs to improve the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity, and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter, sulfur dioxide, and carbon dioxide through the addition of chemicals into the furnace using TIFI targeted in-furnace injection technology. This segment offers its FUEL CHEM program for plants operating in the electric utility, industrial, pulp and paper, waste-to-energy, and university and district heating markets; and the owners of boilers, furnaces, and other combustion units. Fuel Tech, Inc. was incorporated in 1987 and is headquartered in Warrenville, Illinois.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the customers' facilities, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at the customers' facilities. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents; and on-site management and clinical consulting services to facilities. It serves long-term and post-acute care facilities, hospitals, and the healthcare industry through referrals and solicitation of target facilities. The company was incorporated in 1976 and is based in Bensalem, Pennsylvania.