Consolidated Water Co. (NASDAQ: CWCO) and Connecticut Water Service (NASDAQ:CTWS) are both small-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.
Valuation & Earnings
This table compares Consolidated Water Co. and Connecticut Water Service’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Consolidated Water Co.||$59.39 million||3.10||$12.73 million||$0.20||61.75|
|Connecticut Water Service||$99.58 million||6.35||$43.18 million||$2.00||27.36|
Connecticut Water Service has higher revenue and earnings than Consolidated Water Co.. Connecticut Water Service is trading at a lower price-to-earnings ratio than Consolidated Water Co., indicating that it is currently the more affordable of the two stocks.
Consolidated Water Co. pays an annual dividend of $0.30 per share and has a dividend yield of 2.4%. Connecticut Water Service pays an annual dividend of $1.19 per share and has a dividend yield of 2.2%. Consolidated Water Co. pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Connecticut Water Service pays out 59.5% of its earnings in the form of a dividend. Consolidated Water Co. has increased its dividend for 47 consecutive years. Consolidated Water Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
51.4% of Consolidated Water Co. shares are owned by institutional investors. Comparatively, 45.6% of Connecticut Water Service shares are owned by institutional investors. 3.2% of Consolidated Water Co. shares are owned by insiders. Comparatively, 2.5% of Connecticut Water Service shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Consolidated Water Co. and Connecticut Water Service’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Consolidated Water Co.||4.98%||5.41%||5.07%|
|Connecticut Water Service||21.37%||9.21%||2.80%|
Volatility & Risk
Consolidated Water Co. has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Connecticut Water Service has a beta of 0.09, meaning that its share price is 91% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Consolidated Water Co. and Connecticut Water Service, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Consolidated Water Co.||0||0||1||0||3.00|
|Connecticut Water Service||0||1||0||0||2.00|
Consolidated Water Co. currently has a consensus price target of $15.00, suggesting a potential upside of 21.46%. Connecticut Water Service has a consensus price target of $52.00, suggesting a potential downside of 4.97%. Given Consolidated Water Co.’s stronger consensus rating and higher probable upside, analysts plainly believe Consolidated Water Co. is more favorable than Connecticut Water Service.
Consolidated Water Co. beats Connecticut Water Service on 9 of the 17 factors compared between the two stocks.
Consolidated Water Co. Company Profile
Consolidated Water Co. Ltd. develops and operates seawater desalination plants (that utilize reverse osmosis technology) and water distribution systems in areas where naturally occurring supplies of potable water are scarce or non-existent. The Company operates in three segments: retail water operations, bulk water operations and services operations. The retail water operations segment produces and supplies water to end users, including residential, commercial and government customers. The bulk water operations segment produces potable water from seawater and sells this water to governments and private customers. The services operations segment provides engineering and management services, including designing and constructing desalination plants, and managing and operating plants owned by affiliated companies. Through its subsidiaries and affiliates, it provides various services to its customers in the Cayman Islands, The Bahamas, Belize, the British Virgin Islands and Indonesia.
Connecticut Water Service Company Profile
Connecticut Water Service, Inc. is a non-operating holding company. The Company’s income is derived from the earnings of its subsidiary companies, including The Connecticut Water Company (Connecticut Water), The Maine Water Company (Maine Water), New England Water Utility Services, Inc. (NEWUS),The Avon Water Company (AWC) and Chester Realty Company (Chester Realty). It operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Activities segment consists of its regulated water activities to supply public drinking water to customers. The Real Estate Transactions segment involves the sale or donation for income tax benefits of its real estate holdings. Services and Rentals segment provides contracted services to water and wastewater utilities and other clients, and also leases certain of the Company’s properties to third parties through unregulated companies in the State of Connecticut and through Maine Water in the State of Maine.
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