We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AWR or GWRS: Which Water Utility Stock Should You Invest in?
Read MoreHide Full Article
The Zacks Utility - Water Supply industry includes companies that are involved in providing drinking water and wastewater services to industrial, commercial and residential customer classes, along with numerous military bases across the country.
A continuous uninterrupted supply of clean potable water and reliable sewer services is essential for healthy and hygienic living. Water utilities across the United States are silently doing this important task day in and day out to meet the increasing demand of millions of Americans.
Utility operators own storage tanks, treatment plants and desalination plants to supply uninterrupted potable water across customer classes. Water utility operators also own more than 2 million miles of pipelines that are getting old.
The water and wastewater infrastructure is aging and gradually nearing the end of its effective service life. Per the U.S Environmental Protection Agency, an estimated $744 billion investment is necessary to maintain and expand the drinking water and wastewater services to meet demand over the next 20 years.
Given the current situation, investor-owned water utilities and the government are funding water and wastewater infrastructure projects to upgrade the necessary infrastructure.
In this article, we run a comparative analysis on two Utility – Water Supply companies — American States Water Company (AWR - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) — to decide which stock is a better pick for your portfolio now.
The Zacks Consensus Estimate for American States Water’s 2023 earnings per share and revenues is pegged at $2.71 and $0.5 billion, respectively. The top and bottom lines reflect year-over-year growth of 17.32% and 7.22%, respectively.
The Zacks Consensus Estimate for Global Water Resources’ 2023 earnings per share and revenues is pegged at 23 cents and $0.04 billion, respectively. The top and bottom lines reflect year-over-year growth of 43.7% and 5.9%, respectively.
Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for American States Water and Global Water Resources is 11.7% and 14.9%, respectively. Both companies have outperformed the industry’s ROE of 10.3%.
Dividend Yield
Utility companies generally distribute dividends. Currently, the dividend yield of American States Water is 1.82%, while the same for Global Water Resources is 2.36%. The average dividend yield of the industry is 1.87%.
Price Performance
In the year-to-date period, American States Water shares have lost 5.7% compared with the industry's decline of 8.1%. Shares of Global Water Resources have lost 5.1% in the same time frame.
Price Performance (Year to Date)
Image Source: Zacks Investment Research
Debt to Capital
Debt to capital is a good indicator of a company’s financial position. The indicator shows how much debt is used to run the business. American States Water and Global Water Resources have a debt to capital of 39.77% and 71.4%, respectively, compared with the industry’s 46.2%.
Outcome
Both companies efficiently provide water and wastewater services to their customers. They are evenly matched and are good picks for your portfolio. But our choice at this moment is Global Water Resources, given its better earnings estimate revision, better return on equity level and higher dividend yield in comparison to American States Water.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
AWR or GWRS: Which Water Utility Stock Should You Invest in?
The Zacks Utility - Water Supply industry includes companies that are involved in providing drinking water and wastewater services to industrial, commercial and residential customer classes, along with numerous military bases across the country.
A continuous uninterrupted supply of clean potable water and reliable sewer services is essential for healthy and hygienic living. Water utilities across the United States are silently doing this important task day in and day out to meet the increasing demand of millions of Americans.
Utility operators own storage tanks, treatment plants and desalination plants to supply uninterrupted potable water across customer classes. Water utility operators also own more than 2 million miles of pipelines that are getting old.
The water and wastewater infrastructure is aging and gradually nearing the end of its effective service life. Per the U.S Environmental Protection Agency, an estimated $744 billion investment is necessary to maintain and expand the drinking water and wastewater services to meet demand over the next 20 years.
Given the current situation, investor-owned water utilities and the government are funding water and wastewater infrastructure projects to upgrade the necessary infrastructure.
In this article, we run a comparative analysis on two Utility – Water Supply companies — American States Water Company (AWR - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) — to decide which stock is a better pick for your portfolio now.
Each of the stocks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projections
The Zacks Consensus Estimate for American States Water’s 2023 earnings per share and revenues is pegged at $2.71 and $0.5 billion, respectively. The top and bottom lines reflect year-over-year growth of 17.32% and 7.22%, respectively.
The Zacks Consensus Estimate for Global Water Resources’ 2023 earnings per share and revenues is pegged at 23 cents and $0.04 billion, respectively. The top and bottom lines reflect year-over-year growth of 43.7% and 5.9%, respectively.
Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for American States Water and Global Water Resources is 11.7% and 14.9%, respectively. Both companies have outperformed the industry’s ROE of 10.3%.
Dividend Yield
Utility companies generally distribute dividends. Currently, the dividend yield of American States Water is 1.82%, while the same for Global Water Resources is 2.36%. The average dividend yield of the industry is 1.87%.
Price Performance
In the year-to-date period, American States Water shares have lost 5.7% compared with the industry's decline of 8.1%. Shares of Global Water Resources have lost 5.1% in the same time frame.
Price Performance (Year to Date)
Image Source: Zacks Investment Research
Debt to Capital
Debt to capital is a good indicator of a company’s financial position. The indicator shows how much debt is used to run the business. American States Water and Global Water Resources have a debt to capital of 39.77% and 71.4%, respectively, compared with the industry’s 46.2%.
Outcome
Both companies efficiently provide water and wastewater services to their customers. They are evenly matched and are good picks for your portfolio. But our choice at this moment is Global Water Resources, given its better earnings estimate revision, better return on equity level and higher dividend yield in comparison to American States Water.