Pure Cycle Corporation (NASDAQ: PCYO) and AquaVenture Holdings (NASDAQ:WAAS) are both small-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitabiliy, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Insider and Institutional Ownership
66.5% of Pure Cycle Corporation shares are owned by institutional investors. 4.6% of Pure Cycle Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Pure Cycle Corporation and AquaVenture Holdings’ top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Pure Cycle Corporation | $719,142.00 | 246.08 | -$1.65 million | N/A | N/A |
| AquaVenture Holdings | $115.98 million | 3.65 | $15.78 million | N/A | N/A |
AquaVenture Holdings has higher revenue and earnings than Pure Cycle Corporation.
Profitability
This table compares Pure Cycle Corporation and AquaVenture Holdings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Pure Cycle Corporation | -238.22% | -2.45% | -2.37% |
| AquaVenture Holdings | -21.12% | -6.72% | -4.64% |
Analyst Ratings
This is a summary of current recommendations and price targets for Pure Cycle Corporation and AquaVenture Holdings, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Pure Cycle Corporation | 0 | 0 | 1 | 0 | 3.00 |
| AquaVenture Holdings | 0 | 0 | 4 | 1 | 3.20 |
AquaVenture Holdings has a consensus target price of $27.00, suggesting a potential upside of 68.54%. Given AquaVenture Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe AquaVenture Holdings is more favorable than Pure Cycle Corporation.
Summary
AquaVenture Holdings beats Pure Cycle Corporation on 7 of the 12 factors compared between the two stocks.
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.
AquaVenture Holdings Company Profile
AquaVenture Holdings Limited is a multinational provider of Water-as-a-Service solutions. The Company’s segments are Seven Seas Water and Quench. The Seven Seas Water segment provides outsourced desalination solutions and wastewater treatment for governmental, municipal, industrial and hospitality customers. The Quench segment provides bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States typically under multi-year contracts. The Company’s solutions utilize seawater reverse osmosis and other purification technologies to produce potable and industrial process water in high volumes for customers operating in regions with limited access to potable water. As of December 31, 2016, it operated 10 water treatment facilities in the Caribbean region and South America producing approximately eight billion gallons of purified water per year.
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