Reviewing AquaVenture Holdings (WAAS) and California Water Service Group Holding (CWT)

AquaVenture Holdings (NASDAQ: WAAS) and California Water Service Group Holding (NYSE:CWT) are both small-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Dividends

California Water Service Group Holding pays an annual dividend of $0.72 per share and has a dividend yield of 2.0%. AquaVenture Holdings 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 increased its dividend for 49 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for AquaVenture Holdings and California Water Service Group Holding, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AquaVenture Holdings	0	0	4	1	3.20
California Water Service Group Holding	2	5	0	0	1.71

AquaVenture Holdings presently has a consensus price target of $25.60, indicating a potential upside of 58.22%. California Water Service Group Holding has a consensus price target of $32.25, indicating a potential downside of 12.01%. Given AquaVenture Holdings’ stronger consensus rating and higher probable upside, equities research analysts plainly believe AquaVenture Holdings is more favorable than California Water Service Group Holding.

Institutional and Insider Ownership

68.3% of California Water Service Group Holding shares are held by institutional investors. 1.0% of California Water Service Group Holding shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares AquaVenture Holdings and California Water Service Group Holding’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AquaVenture Holdings	-18.49%	-6.11%	-4.25%
California Water Service Group Holding	9.17%	8.78%	2.36%

Earnings and Valuation

This table compares AquaVenture Holdings and California Water Service Group Holding’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
AquaVenture Holdings	$117.61 million	3.64	$13.13 million	N/A	N/A
California Water Service Group Holding	$628.37 million	2.80	$183.94 million	$1.20	30.54

California Water Service Group Holding has higher revenue and earnings than AquaVenture Holdings.

Summary

California Water Service Group Holding beats AquaVenture Holdings on 9 of the 15 factors compared between the two stocks.

About AquaVenture Holdings

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.

About California Water Service Group Holding

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.