Analyzing Pure Cycle (PCYO) and Its Peers

Pure Cycle (NASDAQ:PCYO) is one of 38 public companies in the “Water Utilities” industry, but how does it contrast to its rivals? We will compare Pure Cycle to similar companies based on the strength of its profitability, dividends, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Pure Cycle and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pure Cycle	43.66%	9.98%	8.75%
Pure Cycle Competitors	0.35%	-0.86%	1.79%

Valuation and Earnings

This table compares Pure Cycle and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Pure Cycle	$33.73 million	$13.11 million	17.54
Pure Cycle Competitors	$4.33 billion	$270.20 million	13.55

Pure Cycle’s rivals have higher revenue and earnings than Pure Cycle. Pure Cycle is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

51.4% of Pure Cycle shares are held by institutional investors. Comparatively, 57.7% of shares of all “Water Utilities” companies are held by institutional investors. 6.1% of Pure Cycle shares are held by company insiders. Comparatively, 7.7% of shares of all “Water Utilities” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Pure Cycle has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Pure Cycle’s rivals have a beta of 0.77, indicating that their average share price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Pure Cycle and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pure Cycle	0	1	0	0	2.00
Pure Cycle Competitors	407	1230	1025	31	2.25

As a group, “Water Utilities” companies have a potential upside of 93.42%. Given Pure Cycle’s rivals stronger consensus rating and higher probable upside, analysts clearly believe Pure Cycle has less favorable growth aspects than its rivals.

Summary

Pure Cycle rivals beat Pure Cycle on 8 of the 13 factors compared.

Pure Cycle Company Profile

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of 930-acre master-planned community; oil and gas leasing business; and construction and leasing of single-family homes. It serves domestic, commercial, and industrial customers in the Eastern Denver metropolitan region. Pure Cycle Corporation was incorporated in 1976 and is based in Watkins, Colorado.