California Water Service Group Holding (NYSE: CWT) and AquaVenture Holdings (NYSE:WAAS) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.
This table compares California Water Service Group Holding and AquaVenture Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|California Water Service Group Holding||10.46%||10.31%||2.75%|
This is a breakdown of current ratings and target prices for California Water Service Group Holding and AquaVenture Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|California Water Service Group Holding||2||5||0||0||1.71|
California Water Service Group Holding presently has a consensus target price of $33.00, suggesting a potential downside of 25.17%. AquaVenture Holdings has a consensus target price of $22.00, suggesting a potential upside of 46.28%. Given AquaVenture Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe AquaVenture Holdings is more favorable than California Water Service Group Holding.
Earnings & Valuation
This table compares California Water Service Group Holding and AquaVenture Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|California Water Service Group Holding||$609.37 million||3.47||$48.67 million||$1.42||31.06|
|AquaVenture Holdings||$114.10 million||3.49||-$20.47 million||($1.01)||-14.89|
California Water Service Group Holding has higher revenue and earnings than AquaVenture Holdings. AquaVenture Holdings is trading at a lower price-to-earnings ratio than California Water Service Group Holding, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
68.5% of California Water Service Group Holding shares are held by institutional investors. Comparatively, 38.8% of AquaVenture Holdings shares are held by institutional investors. 1.0% of California Water Service Group Holding shares are held by company insiders. Comparatively, 55.9% of AquaVenture Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
California Water Service Group Holding pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. AquaVenture Holdings does not pay a dividend. California Water Service Group Holding pays out 50.7% of its earnings in the form of a dividend. AquaVenture Holdings has increased its dividend for 49 consecutive years.
About California Water Service Group Holding
California Water Service Group is a holding company. The Company operates through the supply and distribution of water and providing water-related utility services segment. The Company, through its subsidiaries, provides non-regulated services and non-regulated services to private companies and municipalities. The bulk of the business consists of the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and for fire protection. It also provides non-regulated water-related services. The non-regulated services include water system operation, billing and meter reading services. Non-regulated operations also include the lease of communication antenna sites, lab services and promotion of other non-regulated services. The Company under its non-regulated contract arrangements, operates municipally owned water systems, privately owned water and recycled water distribution systems.
About AquaVenture Holdings
AquaVenture Holdings Limited is a multinational provider of Water-as-a-Service solutions. The Company’s segments are Seven Seas Water and Quench. The Seven Seas Water segment provides outsourced desalination solutions and wastewater treatment for governmental, municipal, industrial and hospitality customers. The Quench segment provides bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States typically under multi-year contracts. The Company’s solutions utilize seawater reverse osmosis and other purification technologies to produce potable and industrial process water in high volumes for customers operating in regions with limited access to potable water. As of December 31, 2016, it operated 10 water treatment facilities in the Caribbean region and South America producing approximately eight billion gallons of purified water per year.
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