Analyzing Cadiz (CDZI) and American Water Works (AWK)
Cadiz (NASDAQ: CDZI) and American Water Works (NYSE:AWK) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.
This is a breakdown of current recommendations for Cadiz and American Water Works, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Water Works||0||7||1||0||2.13|
American Water Works pays an annual dividend of $1.66 per share and has a dividend yield of 2.1%. Cadiz does not pay a dividend. American Water Works pays out 70.0% of its earnings in the form of a dividend. Cadiz has raised its dividend for 9 consecutive years.
Risk & Volatility
Cadiz has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, American Water Works has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.
Institutional and Insider Ownership
49.0% of Cadiz shares are owned by institutional investors. Comparatively, 81.4% of American Water Works shares are owned by institutional investors. 5.6% of Cadiz shares are owned by insiders. Comparatively, 0.3% of American Water Works shares are owned 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.
Earnings & Valuation
This table compares Cadiz and American Water Works’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Water Works||$3.36 billion||4.29||$468.00 million||$2.37||34.02|
American Water Works has higher revenue and earnings than Cadiz. Cadiz is trading at a lower price-to-earnings ratio than American Water Works, indicating that it is currently the more affordable of the two stocks.
This table compares Cadiz and American Water Works’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Water Works||12.69%||10.03%||2.83%|
American Water Works beats Cadiz on 8 of the 15 factors compared between the two stocks.
Cadiz Inc. is a land and water resource development company. As of December 31, 2016, the Company had 45,000 acres of land in three areas of eastern San Bernardino County, California. The Company’s primary business is to acquire and develop land with water resources for various uses, including groundwater supply, groundwater storage and agriculture. As of December 31, 2016, the Company was focused on the development of the Cadiz Valley Water Conservation, Recovery and Storage Project (Water Project or Project), which captures and conserves native groundwater being lost to evaporation from the aquifer system beneath its 34,000-acre property in the Cadiz and Fenner valleys of eastern San Bernardino County (the Cadiz/Fenner Property), and delivers it to water providers throughout Southern California. Its development activities include water resource and agricultural development at its San Bernardino County properties.
About American Water Works
American Water Works Company, Inc. is a holding company for regulated and market-based subsidiaries throughout the United States and Ontario, Canada. The Company’s Regulated Businesses segment provides water and wastewater services as public utilities in 16 states in the United States as of December 31, 2016. The Market-Based Businesses consists of four segments, including Military Services Group, which conducts operation and maintenance (O&M) of water and wastewater systems for military bases; Contract Operations Group, which conducts O&M of water and wastewater facilities for municipalities and the food and beverage industry; Homeowner Services Group, which primarily provides water and sewer line protection plans for homeowners, and Keystone, which provides water services for natural gas exploration and production companies. The Company, through its subsidiary, American Water Works Service Company, Inc. provides support and operational services for its operating subsidiaries.
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