Aqua America (WTR) and SJW Group (SJW) Critical Comparison

Aqua America (NYSE: WTR) and SJW Group (NYSE:SJW) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Valuation and Earnings

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This table compares Aqua America and SJW Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aqua America $809.53 million 7.78 $239.73 million $1.37 25.85
SJW Group $389.23 million 3.23 $59.20 million $2.26 27.08

Aqua America has higher revenue and earnings than SJW Group. Aqua America is trading at a lower price-to-earnings ratio than SJW Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Aqua America and SJW Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aqua America 29.61% 12.68% 3.81%
SJW Group 14.38% 10.46% 3.19%

Risk & Volatility

Aqua America has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, SJW Group has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500.

Insider & Institutional Ownership

54.4% of Aqua America shares are held by institutional investors. Comparatively, 55.2% of SJW Group shares are held by institutional investors. 0.2% of Aqua America shares are held by insiders. Comparatively, 17.2% of SJW Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Aqua America pays an annual dividend of $0.82 per share and has a dividend yield of 2.3%. SJW Group pays an annual dividend of $1.12 per share and has a dividend yield of 1.8%. Aqua America pays out 59.9% of its earnings in the form of a dividend. SJW Group pays out 49.6% 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. Aqua America has increased its dividend for 10 consecutive years and SJW Group has increased its dividend for 50 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Aqua America and SJW Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aqua America 0 6 2 0 2.25
SJW Group 0 1 0 0 2.00

Aqua America presently has a consensus target price of $37.83, indicating a potential upside of 6.81%. Given Aqua America’s stronger consensus rating and higher possible upside, research analysts clearly believe Aqua America is more favorable than SJW Group.

Summary

Aqua America beats SJW Group on 11 of the 17 factors compared between the two stocks.

Aqua America Company Profile

Aqua America, Inc., through its subsidiaries, operates regulated utilities that provide water or wastewater services in the United States. It offers water and wastewater services through operating and maintenance contracts with municipal authorities and other parties. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry. It serves approximately three million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, and Virginia. The company was formerly known as Philadelphia Suburban Corporation and changed its name to Aqua America, Inc. in 2004. Aqua America, Inc. was founded in 1968 and is based in Bryn Mawr, Pennsylvania.

SJW Group Company Profile

SJW Group, through its subsidiaries, provides water utility services in the United States. It engages in the production, purchase, storage, purification, distribution, wholesale, and retail sale of water. The company also provides non-tariffed services, including water system operations, maintenance agreements, and antenna site leases. Its water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the Santa Clara Valley Water District. The company offers water service to approximately 230,000 connections that serve approximately 1 million people residing in portions of the cities of San Jose and Cupertino, as well as in the cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos; and adjacent unincorporated territories in the County of Santa Clara in the State of California. In addition, it provides water service to approximately 14,000 connections, which serve 42,000 people in a service area comprising 244 square miles in the region between San Antonio and Austin, Texas. Further, the company, through its subsidiary, SJW Land Company, owns undeveloped land in Tennessee; and owns and operates commercial buildings in Tennessee. The company was formerly known as SJW Corp. and changed its name to SJW Group in November 2016. SJW Group was founded in 1866 and is headquartered in San Jose, California.

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