Consolidated Water Co. (NASDAQ: CWCO) and Connecticut Water Service (NASDAQ:CTWS) are both small-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends 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 3.11 $12.82 million $0.20 62.00
Connecticut Water Service $101.43 million 6.34 $44.36 million $2.00 27.77

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.

Risk and Volatility

Consolidated Water Co. has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Connecticut Water Service has a beta of 0.09, suggesting that its stock price is 91% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations 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. presently has a consensus price target of $15.00, suggesting a potential upside of 20.97%. Connecticut Water Service has a consensus price target of $52.00, suggesting a potential downside of 6.37%. Given Consolidated Water Co.’s stronger consensus rating and higher possible upside, equities analysts plainly believe Consolidated Water Co. is more favorable than Connecticut Water Service.

Profitability

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% 5.40% 5.06%
Connecticut Water Service 21.37% 9.21% 2.80%

Insider and Institutional Ownership

51.4% of Consolidated Water Co. shares are held by institutional investors. Comparatively, 46.6% of Connecticut Water Service shares are held by institutional investors. 3.2% of Consolidated Water Co. shares are held by company insiders. Comparatively, 2.5% of Connecticut Water Service shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

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 2.1%. 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. Connecticut Water Service has raised its dividend for 47 consecutive years.

Summary

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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