Financial Analysis: Scope Industries (OTCMKTS:SCPJ) & LiqTech International (NASDAQ:LIQT)

Scope Industries (OTCMKTS:SCPJ) and LiqTech International (NASDAQ:LIQT) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Earnings and Valuation

This table compares Scope Industries and LiqTech International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scope Industries	N/A	N/A	N/A	N/A	N/A
LiqTech International	$14.60 million	1.59	-$10.35 million	($1.35)	-1.79

Scope Industries has higher earnings, but lower revenue than LiqTech International.

Profitability

This table compares Scope Industries and LiqTech International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scope Industries	N/A	N/A	N/A
LiqTech International	-66.94%	-72.53%	-33.00%

Institutional and Insider Ownership

35.1% of LiqTech International shares are owned by institutional investors. 68.1% of Scope Industries shares are owned by insiders. Comparatively, 12.8% of LiqTech International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Scope Industries has a beta of -0.46, suggesting that its share price is 146% less volatile than the S&P 500. Comparatively, LiqTech International has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Scope Industries and LiqTech International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scope Industries	0	0	0	0	0.00
LiqTech International	0	0	2	0	3.00

LiqTech International has a consensus target price of $4.80, suggesting a potential upside of 99.17%. Given LiqTech International’s stronger consensus rating and higher possible upside, analysts plainly believe LiqTech International is more favorable than Scope Industries.

Summary

LiqTech International beats Scope Industries on 6 of the 10 factors compared between the two stocks.

About Scope Industries

Scope Industries offers waste material recycling services in the United States. It operates plants for the collection and processing of bakery waste materials into a food supplement for animals. The company sells this food supplement to poultry farms, dairies, feed lots, and pet food manufacturers. Scope Industries also owns and operates a plant in Vernon, California, where certain bakery waste material is processed and converted into edible breadcrumbs for human consumption. The company's customers include prepackaged and restaurant supply food processors. Scope Industries was organized in 1938 and its principal executive offices are located in Santa Monica, California. Scope Industries sold all of the outstanding shares of its wholly owned subsidiary, Scope Beauty Enterprises, Inc., doing business as Marinello Schools of Beauty, to B & H Education, Inc. in March 2004.

About LiqTech International

LiqTech International, Inc., a clean technology company, designs, develops, produces, markets, and sells automated filtering systems, ceramic silicon carbide liquid applications, and diesel particulate air filters in the United States, Canada, Europe, Asia, and South America. The company operates through Water, Ceramics, and Plastics segments. It also manufactures and sells silicon carbide ceramic filtration technologies for liquid and gas purification; and diesel particulate filters for exhaust emission control solutions to the verified retrofit and the original equipment manufacturer market. In addition, the company develops, manufactures, and sells liquid filtration systems, which are used for the marine scrubber systems, filtration of produced water, industrial applications, pool and spa water, food and beverage application, and silicon carbide membrane technology. Further, it provides flexible and plastics manufacturing products for machining, welding, bending, and solvent cementing. LiqTech International, Inc. sells its products primarily to industrial customers through direct sales, systems integrators, distributors, agents, and partners. The company was formerly known as Blue Moose Media, Inc. and changed its name to LiqTech International, Inc. in October 2011. LiqTech International, Inc. was founded in 2000 and is headquartered in Ballerup, Denmark.