Head to Head Analysis: Essential Utilities (NYSE:WTRG) versus Middlesex Water (NASDAQ:MSEX)

Middlesex Water (NASDAQ:MSEX) and Essential Utilities (NYSE:WTRG) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Middlesex Water and Essential Utilities, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Middlesex Water	0	3	0	1	2.50
Essential Utilities	1	0	3	1	2.80

Middlesex Water currently has a consensus price target of $60.75, indicating a potential upside of 1.47%. Essential Utilities has a consensus price target of $43.00, indicating a potential downside of 5.47%. Given Middlesex Water’s higher probable upside, equities research analysts plainly believe Middlesex Water is more favorable than Essential Utilities.

Institutional & Insider Ownership

79.5% of Middlesex Water shares are owned by institutional investors. Comparatively, 74.8% of Essential Utilities shares are owned by institutional investors. 1.9% of Middlesex Water shares are owned by insiders. Comparatively, 0.4% of Essential Utilities 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.

Dividends

Middlesex Water pays an annual dividend of $1.44 per share and has a dividend yield of 2.4%. Essential Utilities pays an annual dividend of $1.44 per share and has a dividend yield of 3.2%. Middlesex Water pays out 52.0% of its earnings in the form of a dividend. Essential Utilities pays out 72.4% 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. Middlesex Water has increased its dividend for 52 consecutive years and Essential Utilities has increased its dividend for 32 consecutive years.

Risk & Volatility

Middlesex Water has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Essential Utilities has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Profitability

This table compares Middlesex Water and Essential Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Middlesex Water	24.50%	10.08%	3.69%
Essential Utilities	21.79%	8.36%	2.93%

Valuation & Earnings

This table compares Middlesex Water and Essential Utilities”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Middlesex Water	$194.69 million	5.88	$42.82 million	$2.77	21.61
Essential Utilities	$2.60 billion	5.01	$616.37 million	$1.99	22.86

Essential Utilities has higher revenue and earnings than Middlesex Water. Middlesex Water is trading at a lower price-to-earnings ratio than Essential Utilities, indicating that it is currently the more affordable of the two stocks.

Summary

Middlesex Water beats Essential Utilities on 11 of the 17 factors compared between the two stocks.

About Middlesex Water

Middlesex Water Company owns and operates regulated water utility and wastewater systems. It operates in Regulated and Non-Regulated segments. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers, as well as provides regulated wastewater systems in New Jersey and Delaware. The Non-Regulated segment provides non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. Middlesex Water Company was incorporated in 1896 and is headquartered in Iselin, New Jersey.

About Essential Utilities

Essential Utilities, Inc., through its subsidiaries, operates regulated utilities that provide water, wastewater, or natural gas services in the United States. The company operates through Regulated Water and Regulated Natural Gas segments. It offers water services through operating and maintenance contract with municipal authorities and other parties. In addition, the company provides utility service line protection solutions and repair services to households. It serves approximately 5.5 million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, and Kentucky under the Aqua and Peoples brands. The company was formerly known as Aqua America, Inc. and changed its name to Essential Utilities, Inc. in February 2020. Essential Utilities, Inc. was founded in 1886 and is headquartered in Bryn Mawr, Pennsylvania.