SJW Corporation (NYSE: SJW) and Middlesex Water (NASDAQ:MSEX) are both small-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitabiliy, risk and dividends.
Analyst Recommendations
This is a summary of current recommendations and price targets for SJW Corporation and Middlesex Water, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SJW Corporation | 0 | 0 | 0 | 0 | N/A |
| Middlesex Water | 0 | 1 | 0 | 0 | 2.00 |
Middlesex Water has a consensus price target of $39.00, suggesting a potential downside of 1.24%. Given Middlesex Water’s higher possible upside, analysts clearly believe Middlesex Water is more favorable than SJW Corporation.
Institutional and Insider Ownership
48.0% of SJW Corporation shares are held by institutional investors. Comparatively, 49.0% of Middlesex Water shares are held by institutional investors. 21.1% of SJW Corporation shares are held by company insiders. Comparatively, 3.5% of Middlesex Water shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
SJW Corporation has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, Middlesex Water has a beta of 0.4, indicating that its stock price is 60% 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 1.8%. Middlesex Water pays an annual dividend of $0.85 per share and has a dividend yield of 2.2%. SJW Corporation pays out 33.6% of its earnings in the form of a dividend. Middlesex Water pays out 62.5% 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. Middlesex Water has increased its dividend for 49 consecutive years. Middlesex Water is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares SJW Corporation and Middlesex Water’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| SJW Corporation | $347.64 million | 2.86 | $140.71 million | $2.59 | 18.75 |
| Middlesex Water | $132.46 million | 4.86 | $53.70 million | $1.36 | 29.04 |
SJW Corporation has higher revenue and earnings than Middlesex Water. SJW Corporation is trading at a lower price-to-earnings ratio than Middlesex Water, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares SJW Corporation and Middlesex Water’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SJW Corporation | 15.28% | 12.10% | 3.48% |
| Middlesex Water | 16.91% | 10.31% | 3.64% |
Summary
Middlesex Water beats SJW Corporation on 9 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.
Middlesex Water Company Profile
Middlesex Water Company is a water utility company. The Company owns and operates regulated water utility and wastewater systems in New Jersey, Delaware and Pennsylvania. The Company also operates water and wastewater systems under contract on behalf of municipal and private clients in New Jersey and Delaware. The Company’s segments include Regulated and Non-Regulated. The Regulated segment is engaged in the business of collecting, treating and distributing water on a retail and wholesale basis to residential, commercial, industrial and fire protection customers in parts of New Jersey, Delaware and Pennsylvania. The Non-Regulated segment primarily consists of non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. The Middlesex System treats, stores and distributes water for residential, commercial, industrial and fire protection purposes.
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