Critical Comparison: Global Water Resources (GWRS) & Consolidated Water Co. (NASDAQ:CWCO)
Global Water Resources (NASDAQ: GWRS) and Consolidated Water Co. (NASDAQ:CWCO) are both small-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitabiliy.
This is a summary of current ratings and price targets for Global Water Resources and Consolidated Water Co., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Global Water Resources||0||0||1||0||3.00|
|Consolidated Water Co.||0||0||1||0||3.00|
Global Water Resources presently has a consensus target price of $11.00, indicating a potential upside of 16.65%. Consolidated Water Co. has a consensus target price of $15.00, indicating a potential upside of 16.28%. Given Global Water Resources’ higher probable upside, analysts clearly believe Global Water Resources is more favorable than Consolidated Water Co..
This table compares Global Water Resources and Consolidated Water Co.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Global Water Resources||-8.36%||6.27%||0.40%|
|Consolidated Water Co.||7.62%||5.34%||5.02%|
Global Water Resources pays an annual dividend of $0.28 per share and has a dividend yield of 3.0%. Consolidated Water Co. pays an annual dividend of $0.30 per share and has a dividend yield of 2.3%. Global Water Resources pays out -215.4% of its earnings in the form of a dividend. Consolidated Water Co. pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Water Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Global Water Resources has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, Consolidated Water Co. has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Institutional & Insider Ownership
16.8% of Global Water Resources shares are held by institutional investors. Comparatively, 50.8% of Consolidated Water Co. shares are held by institutional investors. 3.2% of Consolidated Water Co. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Global Water Resources and Consolidated Water Co.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Global Water Resources||$29.77 million||6.20||$11.40 million||($0.13)||-72.54|
|Consolidated Water Co.||$59.52 million||3.23||$13.25 million||$0.31||41.61|
Consolidated Water Co. has higher revenue and earnings than Global Water Resources. Global Water Resources is trading at a lower price-to-earnings ratio than Consolidated Water Co., indicating that it is currently the more affordable of the two stocks.
Consolidated Water Co. beats Global Water Resources on 8 of the 14 factors compared between the two stocks.
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.
Consolidated Water Co. Company Profile
Consolidated Water Co. Ltd. develops and operates seawater desalination plants (that utilize reverse osmosis technology) and water distribution systems in areas where naturally occurring supplies of potable water are scarce or non-existent. The Company operates in three segments: retail water operations, bulk water operations and services operations. The retail water operations segment produces and supplies water to end users, including residential, commercial and government customers. The bulk water operations segment produces potable water from seawater and sells this water to governments and private customers. The services operations segment provides engineering and management services, including designing and constructing desalination plants, and managing and operating plants owned by affiliated companies. Through its subsidiaries and affiliates, it provides various services to its customers in the Cayman Islands, The Bahamas, Belize, the British Virgin Islands and Indonesia.
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