H2O Innovation (OTCMKTS:HEOFF – Get Free Report) and Middlesex Water (NASDAQ:MSEX – Get Free Report) are both small-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.
Valuation & Earnings
This table compares H2O Innovation and Middlesex Water”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| H2O Innovation | $189.12 million | 1.48 | -$970,000.00 | ($0.01) | -312.01 |
| Middlesex Water | $194.69 million | 5.66 | $42.82 million | $2.59 | 22.58 |
Risk & Volatility
H2O Innovation has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, Middlesex Water has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and price targets for H2O Innovation and Middlesex Water, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| H2O Innovation | 0 | 0 | 0 | 0 | 0.00 |
| Middlesex Water | 0 | 1 | 1 | 0 | 2.50 |
Middlesex Water has a consensus target price of $61.67, suggesting a potential upside of 5.43%. Given Middlesex Water’s stronger consensus rating and higher possible upside, analysts clearly believe Middlesex Water is more favorable than H2O Innovation.
Profitability
This table compares H2O Innovation and Middlesex Water’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| H2O Innovation | -0.68% | 5.82% | 2.73% |
| Middlesex Water | 23.26% | 9.59% | 3.48% |
Insider and Institutional Ownership
79.5% of Middlesex Water shares are held by institutional investors. 4.9% of H2O Innovation shares are held by company insiders. Comparatively, 1.9% of Middlesex Water shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Middlesex Water beats H2O Innovation on 13 of the 14 factors compared between the two stocks.
About H2O Innovation
H2O Innovation Inc. designs and provides integrated water treatment solutions based on membrane filtration technology. It operates through three segments: Water Technologies and Services, Specialty Products, and Operation and Maintenance Services. The company offers membrane filtration technology for municipal, industrial, energy, and natural resources end-users; and aftersales services, as well as digital solutions to monitor and optimize water treatment plants. Its products include the FiberFlex open-source technologies for water treatment systems; the flexMBR for wastewater treatment systems; SILO system for wastewater and water reuse treatment; and FlexBox, a mobile fleet of water and wastewater treatment systems, such as containerized ultrafiltration or reverse osmosis (RO) systems. The company also offers specialty chemicals, consumables, and specialized products for the water industry, including RO membrane chemicals, such as antiscalants, flocculants, biocides, and cleaning chemicals; corrosion resistant equipment for desalination plants; flexible grooved-end couplings, fiberglass reinforced polyester cartridge filter housings, self-cleaning disc and screen filters, bag filters, cartridges, and strainers; and maple farming equipment. In addition, it operates, maintains, and repairs water and wastewater treatment systems, distribution equipment, and associated assets. The company was incorporated in 1995 and is headquartered in Quebec City, Canada. As of December 8, 2023, H2O Innovation Inc. was taken private.
About Middlesex Water
Middlesex Water Company owns and operates regulated water utility and wastewater systems. It operates in Regulated and Non-Regulated segments. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers, as well as provides regulated wastewater systems in New Jersey and Delaware. The Non-Regulated segment provides non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. Middlesex Water Company was incorporated in 1896 and is headquartered in Iselin, New Jersey.
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