California Water Service Group Holding (NYSE: CWT) and Pure Cycle Corporation (NASDAQ:PCYO) are both small-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitabiliy and analyst recommendations.
Volatility and Risk
California Water Service Group Holding has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Pure Cycle Corporation has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.
Insider and Institutional Ownership
68.4% of California Water Service Group Holding shares are held by institutional investors. Comparatively, 66.5% of Pure Cycle Corporation shares are held by institutional investors. 1.0% of California Water Service Group Holding shares are held by insiders. Comparatively, 4.6% of Pure Cycle Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
California Water Service Group Holding pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. Pure Cycle Corporation 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.
Profitability
This table compares California Water Service Group Holding and Pure Cycle Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| California Water Service Group Holding | 9.17% | 8.78% | 2.36% |
| Pure Cycle Corporation | -238.22% | -2.45% | -2.37% |
Analyst Ratings
This is a summary of current ratings and target prices for California Water Service Group Holding and Pure Cycle Corporation, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| California Water Service Group Holding | 2 | 5 | 0 | 0 | 1.71 |
| Pure Cycle Corporation | 0 | 0 | 1 | 0 | 3.00 |
California Water Service Group Holding currently has a consensus price target of $32.25, suggesting a potential downside of 17.62%. Given California Water Service Group Holding’s higher probable upside, equities analysts plainly believe California Water Service Group Holding is more favorable than Pure Cycle Corporation.
Valuation and Earnings
This table compares California Water Service Group Holding and Pure Cycle Corporation’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| California Water Service Group Holding | $628.37 million | 2.99 | $183.94 million | $1.20 | 32.63 |
| Pure Cycle Corporation | $719,142.00 | 246.08 | -$1.65 million | N/A | N/A |
California Water Service Group Holding has higher revenue and earnings than Pure Cycle Corporation.
Summary
California Water Service Group Holding beats Pure Cycle Corporation on 9 of the 15 factors compared between the two stocks.
California Water Service Group Holding Company Profile
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.
Pure Cycle Corporation Company Profile
Pure Cycle Corporation is an integrated water company that provides wholesale water and wastewater services. The Company provides its services to wholesale customers, which include industrial customers and local governmental entities that provide water and wastewater services to their end-use customers located in the Denver, Colorado metropolitan area. The Company is engaged in selling water service to customers, using water rights owned or controlled by the Company and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. The Company owns a portfolio of water rights located in the Denver, Colorado metropolitan area, Southeastern Colorado in the Arkansas River, and the Western Slope of Colorado in the Colorado River. The Company’s Denver area assets include Rangeview Water, the Lowry Range Property, Sky Ranch and Arapahoe County Fairgrounds.
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