SJW Corporation (NYSE: SJW) and Consolidated Water Co. (NASDAQ:CWCO) are both small-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Valuation and Earnings

This table compares SJW Corporation and Consolidated Water Co.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SJW Corporation $362.77 million 3.06 $142.70 million $2.67 20.27
Consolidated Water Co. $59.39 million 3.10 $12.82 million $0.20 61.75

SJW Corporation has higher revenue and earnings than Consolidated Water Co.. SJW Corporation 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.

Profitability

This table compares SJW Corporation and Consolidated Water Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SJW Corporation 15.17% 11.96% 3.48%
Consolidated Water Co. 4.98% 5.40% 5.06%

Risk and Volatility

SJW Corporation has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500. Comparatively, Consolidated Water Co. has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Dividends

SJW Corporation pays an annual dividend of $0.87 per share and has a dividend yield of 1.6%. Consolidated Water Co. pays an annual dividend of $0.30 per share and has a dividend yield of 2.4%. SJW Corporation pays out 32.6% of its earnings in the form of a dividend. Consolidated Water Co. pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Consolidated Water Co. has increased its dividend for 49 consecutive years. Consolidated Water Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for SJW Corporation and Consolidated Water Co., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SJW Corporation 0 0 1 0 3.00
Consolidated Water Co. 0 0 1 0 3.00

Consolidated Water Co. has a consensus price target of $15.00, suggesting a potential upside of 21.46%. Given Consolidated Water Co.’s higher possible upside, analysts clearly believe Consolidated Water Co. is more favorable than SJW Corporation.

Institutional & Insider Ownership

48.3% of SJW Corporation shares are owned by institutional investors. Comparatively, 51.4% of Consolidated Water Co. shares are owned by institutional investors. 21.1% of SJW Corporation shares are owned by insiders. Comparatively, 3.2% of Consolidated Water Co. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Consolidated Water Co. beats SJW Corporation on 8 of the 15 factors compared between the two stocks.

SJW Corporation Company Profile

SJW Group, formerly SJW Corp., is a holding company. The Company’s subsidiaries include San Jose Water Company, SJWTX, Inc., SJW Land Company and Texas Water Alliance Limited (TWA). SJWTX, Inc. is doing business as Canyon Lake Water Service Company (CLWSC). It operates through the segments, which include Water Utility Services, Real Estate Services and All Other. Its Water Utility Services segment provides water utility and utility-related services to its customers through its subsidiaries, such as San Jose Water Company, CLWSC and TWA. The Real Estate Services segment includes property management and investment activity conducted by SJW Land Company. The Company’s All Other segment includes its other business activities. San Jose Water Company distributes water to customers in accordance with accepted water utility methods. SJW Land Company owns undeveloped land, and owns and operates a portfolio of commercial buildings in the states of California, Texas, Arizona and Tennessee.

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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