American States Water (NYSE: AWR) and AquaVenture Holdings (NASDAQ:WAAS) are both small-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Profitability

This table compares American States Water and AquaVenture Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American States Water 15.44% 13.70% 4.67%
AquaVenture Holdings -18.49% -6.11% -4.25%

Insider & Institutional Ownership

65.5% of American States Water shares are owned by institutional investors. 1.5% of American States Water shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares American States Water and AquaVenture Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American States Water $442.61 million 4.06 $158.76 million $1.85 26.48
AquaVenture Holdings $117.61 million 3.36 $13.13 million N/A N/A

American States Water has higher revenue and earnings than AquaVenture Holdings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for American States Water and AquaVenture Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American States Water 1 1 0 0 1.50
AquaVenture Holdings 0 0 4 1 3.20

American States Water presently has a consensus target price of $41.00, suggesting a potential downside of 16.29%. AquaVenture Holdings has a consensus target price of $25.60, suggesting a potential upside of 71.24%. Given AquaVenture Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe AquaVenture Holdings is more favorable than American States Water.

Dividends

American States Water pays an annual dividend of $1.02 per share and has a dividend yield of 2.1%. AquaVenture Holdings does not pay a dividend. American States Water pays out 55.1% of its earnings in the form of a dividend. AquaVenture Holdings has increased its dividend for 62 consecutive years.

Summary

American States Water beats AquaVenture Holdings on 9 of the 15 factors compared between the two stocks.

American States Water Company Profile

American States Water Company (AWR) is a holding company. The Company is the parent company of Golden State Water Company (GSWC) and American States Utility Services, Inc. (ASUS), as well as ASUS’ subsidiaries, such as Fort Bliss Water Services Company (FBWS), Terrapin Utility Services, Inc. (TUS), Old Dominion Utility Services, Inc. (ODUS), Palmetto State Utility Services, Inc. (PSUS) and Old North Utility Services, Inc. (ONUS). The Company’s segments include water, electric and contracted services. Within the segments, AWR has two principal business units, water and electric service utility operations, conducted through GSWC, and contracted services conducted through ASUS and its subsidiaries. GSWC is a public utility engaged principally in the purchase, production, distribution and sale of water. As of December 31, 2016, GSWC was engaged in purchase, production, distribution and sale of water in 10 counties in the State of California.

AquaVenture Holdings Company Profile

AquaVenture Holdings Limited is a multinational provider of Water-as-a-Service solutions. The Company’s segments are Seven Seas Water and Quench. The Seven Seas Water segment provides outsourced desalination solutions and wastewater treatment for governmental, municipal, industrial and hospitality customers. The Quench segment provides bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States typically under multi-year contracts. The Company’s solutions utilize seawater reverse osmosis and other purification technologies to produce potable and industrial process water in high volumes for customers operating in regions with limited access to potable water. As of December 31, 2016, it operated 10 water treatment facilities in the Caribbean region and South America producing approximately eight billion gallons of purified water per year.

Receive News & Stock Ratings for American States Water Company Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American States Water Company and related stocks with our FREE daily email newsletter.