American States Water Company (NYSE: AWR) and SJW Corporation (NYSE:SJW) are both small-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.
Earnings and Valuation
This table compares American States Water Company and SJW Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|American States Water Company||$441.37 million||4.14||$157.11 million||$1.68||29.73|
|SJW Corporation||$347.64 million||3.13||$140.71 million||$2.59||20.46|
American States Water Company has higher revenue and earnings than SJW Corporation. SJW Corporation is trading at a lower price-to-earnings ratio than American States Water Company, indicating that it is currently the more affordable of the two stocks.
American States Water Company pays an annual dividend of $0.97 per share and has a dividend yield of 1.9%. SJW Corporation pays an annual dividend of $0.87 per share and has a dividend yield of 1.6%. American States Water Company pays out 57.7% of its earnings in the form of a dividend. SJW Corporation pays out 33.6% 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 States Water Company has increased its dividend for 62 consecutive years and SJW Corporation has increased its dividend for 49 consecutive years. American States Water Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares American States Water Company and SJW Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American States Water Company||14.11%||12.72%||4.30%|
Volatility & Risk
American States Water Company has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, SJW Corporation has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.
Institutional and Insider Ownership
67.5% of American States Water Company shares are held by institutional investors. Comparatively, 46.4% of SJW Corporation shares are held by institutional investors. 1.4% of American States Water Company shares are held by insiders. Comparatively, 21.1% of SJW Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of recent ratings for American States Water Company and SJW Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American States Water Company||1||1||0||0||1.50|
American States Water Company presently has a consensus price target of $40.00, suggesting a potential downside of 19.90%. Given American States Water Company’s higher probable upside, equities analysts plainly believe American States Water Company is more favorable than SJW Corporation.
American States Water Company beats SJW Corporation on 11 of the 15 factors compared between the two stocks.
About American States Water Company
American States Water Company (AWR) is a holding company. The Company is the parent company of Golden State Water Company (GSWC) and American States Utility Services, Inc. (ASUS), as well as ASUS’ subsidiaries, such as Fort Bliss Water Services Company (FBWS), Terrapin Utility Services, Inc. (TUS), Old Dominion Utility Services, Inc. (ODUS), Palmetto State Utility Services, Inc. (PSUS) and Old North Utility Services, Inc. (ONUS). The Company’s segments include water, electric and contracted services. Within the segments, AWR has two principal business units, water and electric service utility operations, conducted through GSWC, and contracted services conducted through ASUS and its subsidiaries. GSWC is a public utility engaged principally in the purchase, production, distribution and sale of water. As of December 31, 2016, GSWC was engaged in purchase, production, distribution and sale of water in 10 counties in the State of California.
About SJW Corporation
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.
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