The York Water (NASDAQ: YORW) and Artesian Resources Corporation (NASDAQ:ARTNA) are both small-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

35.4% of The York Water shares are held by institutional investors. Comparatively, 39.9% of Artesian Resources Corporation shares are held by institutional investors. 1.1% of The York Water shares are held by company insiders. Comparatively, 20.6% of Artesian Resources Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares The York Water and Artesian Resources Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The York Water 25.05% 10.52% 3.73%
Artesian Resources Corporation 16.58% 9.62% 2.94%

Volatility and Risk

The York Water has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Artesian Resources Corporation has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.

Dividends

The York Water pays an annual dividend of $0.64 per share and has a dividend yield of 1.9%. Artesian Resources Corporation pays an annual dividend of $0.93 per share and has a dividend yield of 2.5%. The York Water pays out 68.8% of its earnings in the form of a dividend. Artesian Resources Corporation pays out 63.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Artesian Resources Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and price targets for The York Water and Artesian Resources Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The York Water 0 0 0 0 N/A
Artesian Resources Corporation 0 1 0 0 2.00

Artesian Resources Corporation has a consensus target price of $41.00, suggesting a potential upside of 10.66%. Given Artesian Resources Corporation’s higher possible upside, analysts clearly believe Artesian Resources Corporation is more favorable than The York Water.

Valuation & Earnings

This table compares The York Water and Artesian Resources Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The York Water $48.03 million 8.80 $28.97 million $0.93 35.38
Artesian Resources Corporation $80.94 million 4.21 $36.76 million $1.47 25.20

Artesian Resources Corporation has higher revenue and earnings than The York Water. Artesian Resources Corporation is trading at a lower price-to-earnings ratio than The York Water, indicating that it is currently the more affordable of the two stocks.

Summary

Artesian Resources Corporation beats The York Water on 8 of the 14 factors compared between the two stocks.

About The York Water

The York Water Company is an investor-owned water utility in the United States. The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water. As of December 31, 2016, it also owned and operated three wastewater collection systems and two wastewater treatment systems. As of December 31, 2016, it operated within its territory, which covered 39 municipalities within York County, Pennsylvania and nine municipalities within Adams County, Pennsylvania. Its two wastewater treatment facilities are located in East Manchester and Lower Windsor Townships. It provides sewer billing services. It has a service line protection program, which allows customers to pay a fixed monthly fee, and it will repair or replace damaged customer service lines. As of December 31, 2016, it obtained the bulk of its water supply from both the South Branch and East Branch of the Codorus Creek, which together had a daily flow of 73 million gallons.

About Artesian Resources Corporation

Artesian Resources Corporation is a holding company. The Company’s subsidiaries offer water, wastewater and other services on the Delmarva Peninsula. The Company distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in the states of Delaware, Maryland and Pennsylvania. The Company also provides wastewater services to customers in Delaware. In addition, the Company provides contract water and wastewater operations, and water, sewer and internal Service Line Protection Plans. As of December 31, 2016, the Company was the holding company of five regulated public utilities: Artesian Water Company, Inc., Artesian Water Pennsylvania, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc. and Artesian Wastewater Maryland, Inc., and three non-regulated subsidiaries: Artesian Utility Development, Inc., Artesian Development Corporation and Artesian Consulting Engineers, Inc.

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