Pure Cycle Corporation (PCYO) versus California Water Service Group Holding (CWT) Critical Review

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

Analyst Ratings

This is a summary of current ratings and price targets for California Water Service Group Holding and Pure Cycle Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
California Water Service Group Holding 2 5 0 0 1.71
Pure Cycle Corporation 0 0 1 0 3.00

California Water Service Group Holding presently has a consensus target price of $32.25, suggesting a potential downside of 12.36%. Given California Water Service Group Holding’s higher probable upside, research analysts clearly believe California Water Service Group Holding is more favorable than Pure Cycle Corporation.

Volatility & Risk

California Water Service Group Holding has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Pure Cycle Corporation has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Profitability

This table compares California Water Service Group Holding and Pure Cycle Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
California Water Service Group Holding 9.17% 8.78% 2.36%
Pure Cycle Corporation -238.22% -2.45% -2.37%

Dividends

California Water Service Group Holding pays an annual dividend of $0.72 per share and has a dividend yield of 2.0%. Pure Cycle Corporation 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.

Valuation and Earnings

This table compares California Water Service Group Holding and Pure Cycle Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
California Water Service Group Holding $628.37 million 2.81 $183.94 million $1.20 30.67
Pure Cycle Corporation $719,142.00 231.22 -$1.65 million N/A N/A

California Water Service Group Holding has higher revenue and earnings than Pure Cycle Corporation.

Institutional & Insider Ownership

68.3% of California Water Service Group Holding shares are owned by institutional investors. Comparatively, 66.8% of Pure Cycle Corporation shares are owned by institutional investors. 1.0% of California Water Service Group Holding shares are owned by company insiders. Comparatively, 4.6% of Pure Cycle Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

California Water Service Group Holding beats Pure Cycle Corporation on 9 of the 15 factors compared between the two stocks.

California Water Service Group Holding Company Profile

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.

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.

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