Reviewing ARQ (NASDAQ:ARQ) and Select Water Solutions (NYSE:WTTR)

ARQ (NASDAQ:ARQ) and Select Water Solutions (NYSE:WTTR) are both small-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Risk and Volatility

ARQ has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500. Comparatively, Select Water Solutions has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Profitability

This table compares ARQ and Select Water Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARQ	-3.33%	-1.11%	-0.86%
Select Water Solutions	1.41%	2.26%	1.38%

Earnings & Valuation

This table compares ARQ and Select Water Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARQ	$108.96 million	1.28	-$5.11 million	($0.10)	-32.75
Select Water Solutions	$1.45 billion	0.89	$30.64 million	$0.19	56.46

Select Water Solutions has higher revenue and earnings than ARQ. ARQ is trading at a lower price-to-earnings ratio than Select Water Solutions, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ARQ and Select Water Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARQ	2	0	2	1	2.40
Select Water Solutions	0	3	2	1	2.67

ARQ presently has a consensus target price of $9.00, indicating a potential upside of 174.81%. Select Water Solutions has a consensus target price of $14.00, indicating a potential upside of 30.51%. Given ARQ’s higher possible upside, equities analysts plainly believe ARQ is more favorable than Select Water Solutions.

Institutional and Insider Ownership

18.5% of ARQ shares are owned by institutional investors. Comparatively, 81.7% of Select Water Solutions shares are owned by institutional investors. 23.9% of ARQ shares are owned by company insiders. Comparatively, 7.6% of Select Water Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Select Water Solutions beats ARQ on 9 of the 13 factors compared between the two stocks.

About ARQ

Arq, Inc. is a holding company. It engages in the provision of environmental and emission control equipment to the power generation industry. The company operates through the following Segments: Refined Coal and Advanced Purification Technologies. The Refined Coal segment includes the Tinuum Group, Tinuum Services, and GWN Manager. The Advanced Purification Technologies segment refers to the sale of Activated Carbon Injection and Dry Sorbent Injection equipment systems, chemical sales, consulting services, and other sales related to the reduction of emissions in the coal-fired electric generation process and the electric utility industry. The company was founded in 1996 and is headquartered in Greenwood Village, CO.

About Select Water Solutions

Select Water Solutions, Inc., together with its subsidiaries, provides water management and chemical solutions to the energy industry in the United States. The company operates through three segments: Water Services, Water Infrastructure, and Chemical Technologies. The Water Services segment provides water-related services, including water sourcing, water transfer, flowback and well testing, water containment, fluids hauling, water monitoring, and water network automation; technology solutions comprising hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking, and automated-equipment services, as well as various surface rental equipment and workforce accommodation services. The Water Infrastructure segment engages in the recycling, gathering, transferring, and disposal of water through a network of permanent pipeline infrastructure, semi-permanent pipeline infrastructure, water recycling facilities, earthen pits, water sources, and SWDs; provides solids management services; and develops, builds, and operates semi-permanent and permanent infrastructure solutions. The Chemical Technologies segment provides technical solutions, products, and services related to chemical applications in the oil and gas industry. This segment develops, manufactures, and manages logistics; and provides chemicals used in hydraulic fracturing, stimulation, cementing, and well completions for pressure pumpers and oil and gas producers, as well as offers production chemical solutions for underperforming wells, corrosion and scale monitoring, chemical inventory management, well failure analysis, and lab services. It primarily serves oil and gas producers. The company was formerly known as Select Energy Services, Inc. and changed its name to Select Water Solutions, Inc. in May 2023. Select Water Solutions, Inc. was incorporated in 2016 and is headquartered in Houston, Texas.