Artesian Resources Corporation (NASDAQ: ARTNA) and Connecticut Water Service (NASDAQ:CTWS) are both small-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Risk and Volatility

Artesian Resources Corporation has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500. Comparatively, Connecticut Water Service has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Dividends

Artesian Resources Corporation pays an annual dividend of $0.93 per share and has a dividend yield of 2.4%. Connecticut Water Service pays an annual dividend of $1.19 per share and has a dividend yield of 2.1%. Artesian Resources Corporation pays out 63.3% of its earnings in the form of a dividend. Connecticut Water Service pays out 59.5% 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. Artesian Resources Corporation has increased its dividend for 47 consecutive years. Artesian Resources Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Artesian Resources Corporation and Connecticut Water Service, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Artesian Resources Corporation 0 1 0 0 2.00
Connecticut Water Service 0 0 0 0 N/A

Artesian Resources Corporation currently has a consensus target price of $41.00, suggesting a potential upside of 7.70%. Given Artesian Resources Corporation’s higher possible upside, equities research analysts plainly believe Artesian Resources Corporation is more favorable than Connecticut Water Service.

Insider and Institutional Ownership

39.9% of Artesian Resources Corporation shares are owned by institutional investors. Comparatively, 46.8% of Connecticut Water Service shares are owned by institutional investors. 20.6% of Artesian Resources Corporation shares are owned by company insiders. Comparatively, 2.5% of Connecticut Water Service shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Artesian Resources Corporation and Connecticut Water Service’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Artesian Resources Corporation 16.58% 9.62% 2.94%
Connecticut Water Service 21.37% 9.21% 2.80%

Valuation and Earnings

This table compares Artesian Resources Corporation and Connecticut Water Service’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Artesian Resources Corporation $80.94 million 4.32 $36.76 million $1.47 25.90
Connecticut Water Service $101.43 million 6.45 $44.36 million $2.00 28.26

Connecticut Water Service has higher revenue and earnings than Artesian Resources Corporation. Artesian Resources Corporation is trading at a lower price-to-earnings ratio than Connecticut Water Service, indicating that it is currently the more affordable of the two stocks.

Summary

Connecticut Water Service beats Artesian Resources Corporation on 8 of the 14 factors compared between the two stocks.

Artesian Resources Corporation Company Profile

Artesian Resources Corporation is a holding company. The Company’s subsidiaries offer water, wastewater and other services on the Delmarva Peninsula. The Company distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in the states of Delaware, Maryland and Pennsylvania. The Company also provides wastewater services to customers in Delaware. In addition, the Company provides contract water and wastewater operations, and water, sewer and internal Service Line Protection Plans. As of December 31, 2016, the Company was the holding company of five regulated public utilities: Artesian Water Company, Inc., Artesian Water Pennsylvania, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc. and Artesian Wastewater Maryland, Inc., and three non-regulated subsidiaries: Artesian Utility Development, Inc., Artesian Development Corporation and Artesian Consulting Engineers, Inc.

Connecticut Water Service Company Profile

Connecticut Water Service, Inc. is a non-operating holding company. The Company’s income is derived from the earnings of its subsidiary companies, including The Connecticut Water Company (Connecticut Water), The Maine Water Company (Maine Water), New England Water Utility Services, Inc. (NEWUS),The Avon Water Company (AWC) and Chester Realty Company (Chester Realty). It operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Activities segment consists of its regulated water activities to supply public drinking water to customers. The Real Estate Transactions segment involves the sale or donation for income tax benefits of its real estate holdings. Services and Rentals segment provides contracted services to water and wastewater utilities and other clients, and also leases certain of the Company’s properties to third parties through unregulated companies in the State of Connecticut and through Maine Water in the State of Maine.

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