Head to Head Review: The York Water (NASDAQ:YORW) vs. American Water Works (AWK)
The York Water (NASDAQ: YORW) and American Water Works (NYSE:AWK) are both utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitabiliy.
Valuation & Earnings
This table compares The York Water and American Water Works’ top-line 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||9.84||$29.01 million||$0.93||39.19|
|American Water Works||$3.32 billion||4.40||$1.64 billion||$2.69||30.45|
American Water Works has higher revenue and earnings than The York Water. American Water Works 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 American Water Works’ 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%|
|American Water Works||14.45%||9.92%||2.85%|
The York Water pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. American Water Works pays an annual dividend of $1.66 per share and has a dividend yield of 2.0%. The York Water pays out 68.8% of its earnings in the form of a dividend. American Water Works pays out 61.7% 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. American Water Works has increased its dividend for 8 consecutive years. American Water Works is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current recommendations for The York Water and American Water Works, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The York Water||0||0||0||0||N/A|
|American Water Works||0||4||4||0||2.50|
American Water Works has a consensus price target of $81.67, suggesting a potential downside of 0.31%. Given American Water Works’ higher probable upside, analysts plainly believe American Water Works is more favorable than The York Water.
Risk & Volatility
The York Water has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, American Water Works has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.
Insider & Institutional Ownership
34.8% of The York Water shares are held by institutional investors. Comparatively, 80.6% of American Water Works shares are held by institutional investors. 1.1% of The York Water shares are held by company insiders. Comparatively, 0.3% of American Water Works shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
American Water Works beats The York Water on 9 of the 16 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.
American Water Works Company Profile
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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