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By January 24, 2013 6 Comments

Ecology and Environment, Inc. (NYSE: EEI) Trading Up

Ecology and Environment, Inc. (NYSE: EEI) Trading Up

Ecology and Environment, Inc. (NYSE: EEI) Trading Up

Lancaster New York based environmental consulting firm, Ecology and Environment, Inc. (NYSE: EEI), announced this week that the company has garnered $39 million in contracts to aid in the development of eco-cities for the China International Finance and Guarantee Group. The deal has the blessing of the Chinese government. E & E’s work will be directed at enhancing environmental and health conditions in the fastest emerging growth large economy on the globe. In an interview last week, E & E president and CEO Kevin Neumaier stated “E & E has been working in China since the mid-1980s, learning about the people and culture of China as we have worked on some of their environmental issues.” The company has worked on over 50,000 environmental projects in 122 countries since its inception in 1970. Notably, E & E has supplied environmental solutions in close to every known ecosystem on the planet.

Competitors

Two of its nearest competitors are Acorn Energy Incorporated (NASDAQ: ACFN) and privately held GZA GeoEnvironmental Incorporated. Both companies deal in environmental solutions for pollution issues. GZA operates mainly in the United States providing environmental consulting and regulatory compliance services to a wide variety of businesses. Acorn is a holding company focused on providing digital solutions for energy infrastructure asset management. The company has come under fire lately for maintaining an unsustainable dividend and paying for research from at least two firms which maintain buy ratings on the company. Acorn has a market cap of $134.59 million and shares are trading at $7.47, with a 52 week high of $13.20 and a low of $6.31. GZA operates mainly in the United States providing environmental consulting and regulatory compliance services to a wide variety of businesses.

The Numbers

The company has not had the best year. E & E declared combined revenues for the first quarter of fiscal year 2013 of $36.8 million, a decline of $5.5 million or 13 percent from the $42.3 million the company reported in the first quarter of 2012. Revenue was $29.8 million for the quarter compared to $33.2 million in the first quarter of fiscal year 2012, a dismaying decrease of $3.4 million or 10 percent. The company maintained it had a net income of $.2 million or around $.06 per share for the first quarter of 2013. This is a decline of $1.0 million from the net income of $1.2 million or $.28 per share in the first quarter of last year. On the other hand, compared to the fourth quarter of fiscal year 2012, net income for the first quarter of 2013 has increased to $1.1 million and the company reported a profit of right at $.06 a share. The company has a market cap of $56 million. Shares are currently trading up 5.2 percent at $13.15 per.

Bottom Line

EEI is a commendable business filling a niche in a sector that, as one of my colleagues pointed out, will do nothing but grow as emerging growth countries realize the value of clean water, air and soil. Current dividend yield is a tidy 3.5 percent. It’s worth a little research to see if it fits in with your portfolio. 

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