Head-To-Head Review: American Water Works (NYSE:AWK) versus Global Water Resources (NASDAQ:GWRS)

Global Water Resources (NASDAQ:GWRS) and American Water Works (NYSE:AWK) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Insider and Institutional Ownership

27.9% of Global Water Resources shares are owned by institutional investors. Comparatively, 86.6% of American Water Works shares are owned by institutional investors. 53.7% of Global Water Resources shares are owned by insiders. Comparatively, 0.1% of American Water Works shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Global Water Resources has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, American Water Works has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Global Water Resources	3.98%	2.06%	0.37%
American Water Works	21.26%	10.14%	3.19%

Earnings and Valuation

This table compares Global Water Resources and American Water Works”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Water Resources	$55.76 million	3.91	$2.96 million	$0.08	91.00
American Water Works	$5.34 billion	5.61	$1.11 billion	$5.77	26.07

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

Analyst Recommendations

This is a summary of recent ratings for Global Water Resources and American Water Works, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Water Resources	0	2	0	0	2.00
American Water Works	1	7	1	0	2.00

Global Water Resources currently has a consensus target price of $15.00, indicating a potential upside of 106.04%. American Water Works has a consensus target price of $141.14, indicating a potential downside of 6.17%. Given Global Water Resources’ higher possible upside, analysts plainly believe Global Water Resources is more favorable than American Water Works.

Dividends

Global Water Resources pays an annual dividend of $0.30 per share and has a dividend yield of 4.1%. American Water Works pays an annual dividend of $3.58 per share and has a dividend yield of 2.4%. Global Water Resources pays out 375.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Water Works pays out 62.0% of its earnings in the form of a dividend. Global Water Resources has increased its dividend for 8 consecutive years and American Water Works has increased its dividend for 18 consecutive years.

Summary

American Water Works beats Global Water Resources on 11 of the 16 factors compared between the two stocks.

About Global Water Resources

Global Water Resources, Inc., a water resource management company, owns, operates, and manages regulated water, wastewater, and recycled water systems primarily in metropolitan Phoenix and Tucson, Arizona. It serves approximately 82,000 people in approximately 32,000 homes. The company was founded in 2003 and is based in Phoenix, Arizona.

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.