Cadiz (NASDAQ: CDZI) and Global Water Resources (NASDAQ:GWRS) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
This table compares Cadiz and Global Water Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Global Water Resources||14.14%||15.25%||0.87%|
49.6% of Cadiz shares are held by institutional investors. Comparatively, 16.9% of Global Water Resources shares are held by institutional investors. 5.6% of Cadiz shares are held by insiders. Comparatively, 49.2% of Global Water Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Global Water Resources pays an annual dividend of $0.28 per share and has a dividend yield of 3.0%. Cadiz does not pay a dividend. Global Water Resources pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings & Valuation
This table compares Cadiz and Global Water Resources’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Global Water Resources||$31.21 million||5.79||$4.55 million||$0.22||41.82|
Global Water Resources has higher revenue and earnings than Cadiz. Cadiz is trading at a lower price-to-earnings ratio than Global Water Resources, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Cadiz and Global Water Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Global Water Resources||0||0||1||0||3.00|
Cadiz currently has a consensus price target of $18.00, suggesting a potential upside of 26.76%. Global Water Resources has a consensus price target of $11.00, suggesting a potential upside of 19.57%. Given Cadiz’s higher probable upside, equities research analysts clearly believe Cadiz is more favorable than Global Water Resources.
Volatility and Risk
Cadiz has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Global Water Resources has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500.
Global Water Resources beats Cadiz on 9 of the 14 factors compared between the two stocks.
Cadiz Inc. is a land and water resource development company. As of December 31, 2016, the Company had 45,000 acres of land in three areas of eastern San Bernardino County, California. The Company’s primary business is to acquire and develop land with water resources for various uses, including groundwater supply, groundwater storage and agriculture. As of December 31, 2016, the Company was focused on the development of the Cadiz Valley Water Conservation, Recovery and Storage Project (Water Project or Project), which captures and conserves native groundwater being lost to evaporation from the aquifer system beneath its 34,000-acre property in the Cadiz and Fenner valleys of eastern San Bernardino County (the Cadiz/Fenner Property), and delivers it to water providers throughout Southern California. Its development activities include water resource and agricultural development at its San Bernardino County properties.
About Global Water Resources
Global Water Resources, Inc. is a water resource management company. The Company owns, operates and manages water, wastewater and recycled water utilities in strategically located communities, principally in metropolitan Phoenix, Arizona. The Company focuses on the issues of water supply and scarcity, and applies principles of water conservation through water reclamation and reuse. As of April 28, 2016, the Company owned nine water and wastewater utilities in communities principally in metropolitan Phoenix. As of April 28, 2016, the Company served over 50,000 people in approximately 20,000 homes within its 332 square miles of certificated service areas. The Company is creating renewable water systems where wastewater from homes is treated and used again for various outdoor applications.
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