California Water Service Group (NYSE: CWT) and Global Water Resources (NASDAQ:GWRS) are both small-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
Risk and Volatility
California Water Service Group has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Global Water Resources has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.
This table compares California Water Service Group and Global Water Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|California Water Service Group||$666.89 million||2.88||$67.18 million||$1.40||28.57|
|Global Water Resources||$31.21 million||5.72||$4.55 million||$0.12||75.83|
California Water Service Group has higher revenue and earnings than Global Water Resources. California Water Service Group is trading at a lower price-to-earnings ratio than Global Water Resources, indicating that it is currently the more affordable of the two stocks.
This table compares California Water Service Group and Global Water Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|California Water Service Group||10.07%||9.97%||2.60%|
|Global Water Resources||14.14%||14.91%||0.87%|
California Water Service Group pays an annual dividend of $0.75 per share and has a dividend yield of 1.9%. Global Water Resources pays an annual dividend of $0.28 per share and has a dividend yield of 3.1%. California Water Service Group pays out 53.6% of its earnings in the form of a dividend. Global Water Resources pays out 233.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. California Water Service Group has raised its dividend for 50 consecutive years.
This is a breakdown of recent ratings and target prices for California Water Service Group and Global Water Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|California Water Service Group||2||5||0||0||1.71|
|Global Water Resources||0||0||1||0||3.00|
California Water Service Group presently has a consensus price target of $33.75, indicating a potential downside of 15.63%. Global Water Resources has a consensus price target of $11.00, indicating a potential upside of 20.88%. Given Global Water Resources’ stronger consensus rating and higher possible upside, analysts plainly believe Global Water Resources is more favorable than California Water Service Group.
Insider & Institutional Ownership
65.7% of California Water Service Group shares are owned by institutional investors. Comparatively, 19.5% of Global Water Resources shares are owned by institutional investors. 1.0% of California Water Service Group shares are owned by company insiders. Comparatively, 50.0% of Global Water Resources shares are owned 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.
Global Water Resources beats California Water Service Group on 9 of the 17 factors compared between the two stocks.
California Water Service Group Company Profile
California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. It is involved in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection. The company offers its services to approximately 484,900 customers in 100 California communities; approximately 4,500 water and wastewater customers on the islands of Maui and Hawaii; approximately 16,800 customers in the Tacoma and Olympia areas in Washington; and approximately 8,100 water and wastewater customers in the Belen, Los Lunas, and Elephant Butte areas in New Mexico. It also engages in the provision of non-regulated water-related services, including operating municipally owned water systems, privately owned water, and recycled water distribution systems; providing operational and maintenance, meter reading, and billing services to private companies and municipalities; leasing communication antenna sites on its properties to telecommunication companies; billing optional third-party insurance programs to its residential customers; and providing lab services. California Water Service Group was founded in 1926 and is headquartered in San Jose, California.
Global Water Resources Company Profile
Global Water Resources, Inc., a water resource management company, owns, operates, and manages regulated water, wastewater, and recycled water utilities primarily in metropolitan Phoenix, Arizona. As of December 31, 2017, it served approximately 51,000 people in approximately 20,000 homes. The company was founded in 2003 and is based in Phoenix, Arizona.
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