Reviewing Suez (OTCMKTS:SZEVY) and American Water Works (NYSE:AWK)

American Water Works (NYSE:AWK) and Suez (OTCMKTS:SZEVY) are both utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Volatility & Risk

American Water Works has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Suez has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Dividends

American Water Works pays an annual dividend of $3.58 per share and has a dividend yield of 2.6%. Suez pays an annual dividend of $0.17 per share and has a dividend yield of 2.6%. American Water Works pays out 62.0% of its earnings in the form of a dividend. Suez pays out 53.1% 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. American Water Works has increased its dividend for 18 consecutive years. Suez is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and recommmendations for American Water Works and Suez, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Water Works	1	8	1	0	2.00
Suez	0	0	0	0	0.00

American Water Works presently has a consensus price target of $138.78, indicating a potential upside of 1.11%. Given American Water Works’ stronger consensus rating and higher possible upside, analysts clearly believe American Water Works is more favorable than Suez.

Earnings and Valuation

This table compares American Water Works and Suez”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Water Works	$5.14 billion	5.31	$1.11 billion	$5.77	23.79
Suez	$20.18 billion	0.40	$393.90 million	$0.32	20.30

American Water Works has higher earnings, but lower revenue than Suez. Suez is trading at a lower price-to-earnings ratio than American Water Works, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Water Works and Suez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Water Works	21.35%	10.20%	3.20%
Suez	N/A	N/A	N/A

Insider & Institutional Ownership

86.6% of American Water Works shares are owned by institutional investors. Comparatively, 0.1% of Suez shares are owned by institutional investors. 0.1% of American Water Works shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

American Water Works beats Suez on 13 of the 17 factors compared between the two stocks.

About American Water Works

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.5 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. It also provides water and wastewater services on military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. In addition, the company operates approximately 80 surface water treatment plants; 540 groundwater treatment plants; 175 wastewater treatment plants; 53,700 miles of transmission, distribution, and collection mains and pipes; 1,200 groundwater wells; 1,700 water and wastewater pumping stations; 1,100 treated water storage facilities; and 74 dams. The company was founded in 1886 and is headquartered in Camden, New Jersey.

About Suez

Suez SA, together with its subsidiaries, engages in the water and waste cycle management business in France, Europe, and internationally. The company operates through five segments: Water Europe, Recycling and Recovery Europe, International, Water Technologies & Solutions, and Other. It provides water distribution and treatment services to individuals, local authorities, and industrial clients; and waste collection and treatment services, including collection, sorting, recycling, composting, energy recovery, and landfilling for non-hazardous and hazardous waste for local authorities and industrial clients. The company also offers water network management services; technical assistance, operation, cleaning, and maintenance services; and spare parts, refurbishment, and associated services, as well as designs and operates storage facilities for hazardous and non-hazardous residual waste. In addition, it provides resource management consulting services; engineering and construction contracts and other services; and digital technology solutions for resource and asset protection, as well as deconstructs industrial sites in the end-of-life phase and decontaminates soil and water tables. Additionally, the company generates waste wood biomass energy, as well as engages in plastic recycling activities. It serves food and beverage, chemical and pharmaceutical, construction, mining and metal, oil and gas, power, pulp and paper, electronic and electronic products, leisure, and healthcare industries, as well as automotive, transport, and aeronautic sectors. Suez SA was founded in 1858 and is headquartered in Paris, France.