American States Water Company (NYSE: AWR) and Pure Cycle Corporation (NASDAQ:PCYO) are both small-cap utilities companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitabiliy, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares American States Water Company and Pure Cycle Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American States Water Company 14.11% 12.72% 4.30%
Pure Cycle Corporation -230.56% -2.17% -2.11%

Earnings and Valuation

This table compares American States Water Company and Pure Cycle Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American States Water Company $441.37 million 4.14 $157.11 million $1.68 29.73
Pure Cycle Corporation $685,985.00 275.29 -$1.56 million N/A N/A

American States Water Company has higher revenue and earnings than Pure Cycle Corporation.

Institutional and Insider Ownership

67.5% of American States Water Company shares are held by institutional investors. Comparatively, 66.9% of Pure Cycle Corporation shares are held by institutional investors. 1.4% of American States Water Company shares are held by company insiders. Comparatively, 4.6% of Pure Cycle Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

American States Water Company has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Pure Cycle Corporation has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for American States Water Company and Pure Cycle Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American States Water Company 1 1 0 0 1.50
Pure Cycle Corporation 0 0 1 0 3.00

American States Water Company presently has a consensus target price of $40.00, indicating a potential downside of 19.90%. Given American States Water Company’s higher probable upside, equities analysts plainly believe American States Water Company is more favorable than Pure Cycle Corporation.

Dividends

American States Water Company pays an annual dividend of $0.97 per share and has a dividend yield of 1.9%. Pure Cycle Corporation does not pay a dividend. American States Water Company pays out 57.7% of its earnings in the form of a dividend. Pure Cycle Corporation has increased its dividend for 62 consecutive years.

Summary

American States Water Company beats Pure Cycle Corporation on 8 of the 15 factors compared between the two stocks.

About American States Water Company

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.

About Pure Cycle Corporation

Pure Cycle Corporation is an integrated water company that provides wholesale water and wastewater services. The Company provides its services to wholesale customers, which include industrial customers and local governmental entities that provide water and wastewater services to their end-use customers located in the Denver, Colorado metropolitan area. The Company is engaged in selling water service to customers, using water rights owned or controlled by the Company and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. The Company owns a portfolio of water rights located in the Denver, Colorado metropolitan area, Southeastern Colorado in the Arkansas River, and the Western Slope of Colorado in the Colorado River. The Company’s Denver area assets include Rangeview Water, the Lowry Range Property, Sky Ranch and Arapahoe County Fairgrounds.

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