The York Water (YORW) vs. Global Water Resources (GWRS) Financial Analysis
The York Water (NASDAQ: YORW) and Global Water Resources (NASDAQ:GWRS) are both small-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitabiliy and earnings.
Insider and Institutional Ownership
34.8% of The York Water shares are held by institutional investors. Comparatively, 16.8% of Global Water Resources shares are held by institutional investors. 1.1% of The York Water shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares The York Water and Global Water Resources’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|The York Water||$47.60 million||9.48||$29.01 million||$0.93||37.80|
|Global Water Resources||$29.77 million||6.27||$11.40 million||($0.13)||-73.38|
The York Water has higher revenue and earnings than Global Water Resources. Global Water Resources is trading at a lower price-to-earnings ratio than The York Water, indicating that it is currently the more affordable of the two stocks.
This table compares The York Water and Global Water Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The York Water||25.09%||10.52%||3.75%|
|Global Water Resources||-8.36%||6.27%||0.40%|
The York Water pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. Global Water Resources pays an annual dividend of $0.28 per share and has a dividend yield of 2.9%. The York Water pays out 68.8% of its earnings in the form of a dividend. Global Water Resources pays out -215.4% 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. Global Water Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
The York Water has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Global Water Resources has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for The York Water and Global Water Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The York Water||0||0||0||0||N/A|
|Global Water Resources||0||0||1||0||3.00|
Global Water Resources has a consensus price target of $11.00, suggesting a potential upside of 15.30%. Given Global Water Resources’ higher possible upside, analysts clearly believe Global Water Resources is more favorable than The York Water.
The York Water beats Global Water Resources on 10 of the 15 factors compared between the two stocks.
The York Water Company Profile
The York Water Company is an investor-owned water utility in the United States. The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water. As of December 31, 2016, it also owned and operated three wastewater collection systems and two wastewater treatment systems. As of December 31, 2016, it operated within its territory, which covered 39 municipalities within York County, Pennsylvania and nine municipalities within Adams County, Pennsylvania. Its two wastewater treatment facilities are located in East Manchester and Lower Windsor Townships. It provides sewer billing services. It has a service line protection program, which allows customers to pay a fixed monthly fee, and it will repair or replace damaged customer service lines. As of December 31, 2016, it obtained the bulk of its water supply from both the South Branch and East Branch of the Codorus Creek, which together had a daily flow of 73 million gallons.
Global Water Resources Company Profile
Global Water Resources, Inc. is a water resource management company. The Company owns, operates and manages water, wastewater and recycled water utilities in strategically located communities, principally in metropolitan Phoenix, Arizona. The Company focuses on the issues of water supply and scarcity, and applies principles of water conservation through water reclamation and reuse. As of April 28, 2016, the Company owned nine water and wastewater utilities in communities principally in metropolitan Phoenix. As of April 28, 2016, the Company served over 50,000 people in approximately 20,000 homes within its 332 square miles of certificated service areas. The Company is creating renewable water systems where wastewater from homes is treated and used again for various outdoor applications.
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