AquaVenture Holdings (NASDAQ: WAAS) and California Water Service Group Holding (NYSE:CWT) are both small-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitabiliy, earnings, dividends and valuation.

Dividends

California Water Service Group Holding pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. AquaVenture Holdings does not pay a dividend. California Water Service Group Holding pays out 60.0% of its earnings in the form of a dividend. California Water Service Group Holding has raised its dividend for 49 consecutive years.

Earnings and Valuation

This table compares AquaVenture Holdings and California Water Service Group Holding’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AquaVenture Holdings $115.98 million 3.69 $15.78 million N/A N/A
California Water Service Group Holding $628.37 million 2.94 $183.94 million $1.20 32.08

California Water Service Group Holding has higher revenue and earnings than AquaVenture Holdings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for AquaVenture Holdings and California Water Service Group Holding, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AquaVenture Holdings 0 0 4 1 3.20
California Water Service Group Holding 2 5 0 0 1.71

AquaVenture Holdings currently has a consensus target price of $27.00, indicating a potential upside of 66.67%. California Water Service Group Holding has a consensus target price of $32.25, indicating a potential downside of 16.23%. Given AquaVenture Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe AquaVenture Holdings is more favorable than California Water Service Group Holding.

Institutional & Insider Ownership

68.5% of California Water Service Group Holding shares are held by institutional investors. 1.0% of California Water Service Group Holding shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares AquaVenture Holdings and California Water Service Group Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AquaVenture Holdings -21.12% -6.72% -4.64%
California Water Service Group Holding 9.17% 8.78% 2.36%

Summary

California Water Service Group Holding beats AquaVenture Holdings on 9 of the 15 factors compared between the two stocks.

About AquaVenture Holdings

AquaVenture Holdings Limited is a multinational provider of Water-as-a-Service solutions. The Company’s segments are Seven Seas Water and Quench. The Seven Seas Water segment provides outsourced desalination solutions and wastewater treatment for governmental, municipal, industrial and hospitality customers. The Quench segment provides bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States typically under multi-year contracts. The Company’s solutions utilize seawater reverse osmosis and other purification technologies to produce potable and industrial process water in high volumes for customers operating in regions with limited access to potable water. As of December 31, 2016, it operated 10 water treatment facilities in the Caribbean region and South America producing approximately eight billion gallons of purified water per year.

About California Water Service Group Holding

California Water Service Group is a holding company. The Company operates through the supply and distribution of water and providing water-related utility services segment. The Company, through its subsidiaries, provides non-regulated services and non-regulated services to private companies and municipalities. The bulk of the business consists of the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and for fire protection. It also provides non-regulated water-related services. The non-regulated services include water system operation, billing and meter reading services. Non-regulated operations also include the lease of communication antenna sites, lab services and promotion of other non-regulated services. The Company under its non-regulated contract arrangements, operates municipally owned water systems, privately owned water and recycled water distribution systems.

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