Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE: SBS) and AquaVenture (NYSE:WAAS) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Dividends

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp pays an annual dividend of $0.29 per share and has a dividend yield of 2.9%. AquaVenture does not pay a dividend. Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp pays out 22.3% of its earnings in the form of a dividend.

Institutional & Insider Ownership

16.0% of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp shares are held by institutional investors. Comparatively, 36.8% of AquaVenture shares are held by institutional investors. 1.0% of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp shares are held by insiders. Comparatively, 55.9% of AquaVenture shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp and AquaVenture’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp 19.70% 17.82% 7.79%
AquaVenture -22.56% -7.38% -5.01%

Analyst Recommendations

This is a summary of current ratings and target prices for Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp and AquaVenture, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp 1 2 3 0 2.33
AquaVenture 0 0 4 1 3.20

AquaVenture has a consensus price target of $22.00, suggesting a potential upside of 44.64%. Given AquaVenture’s stronger consensus rating and higher possible upside, analysts clearly believe AquaVenture is more favorable than Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp.

Valuation and Earnings

This table compares Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp and AquaVenture’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp $4.07 billion 1.70 $844.93 million $1.30 7.78
AquaVenture $114.10 million 3.53 -$20.47 million ($1.01) -15.06

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp has higher revenue and earnings than AquaVenture. AquaVenture is trading at a lower price-to-earnings ratio than Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500. Comparatively, AquaVenture has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp Company Profile

Companhia de Saneamento Basico do Estado de Sao Paulo-SABESP is a water and sewage service provider. The Company provides water and sewage services to a range of residential, commercial, industrial and governmental customers in over 360 municipalities in the state of Sao Paulo, including the city of Sao Paulo. The Company’s segments include Water and Sewage. The Company also supplies treated water on a wholesale basis to approximately 10 municipalities located in the Sao Paulo metropolitan region and urban conurbations. The Company’s activities comprise water supply, sanitary sewage services, urban rainwater management and drainage services, urban cleaning services, solid waste management services and related activities, including the planning, operation, maintenance and commercialization of energy, and the commercialization of services, products, benefits and rights that directly or indirectly arise from its assets, operations and activities.

AquaVenture 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.

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