Critical Contrast: Casella Waste Systems (NASDAQ:CWST) & Xylem (NYSE:XYL)

Xylem (NYSE:XYL) and Casella Waste Systems (NASDAQ:CWST) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Profitability

This table compares Xylem and Casella Waste Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xylem	10.79%	11.26%	7.30%
Casella Waste Systems	0.38%	5.19%	2.48%

Valuation & Earnings

This table compares Xylem and Casella Waste Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xylem	$9.04 billion	3.05	$957.00 million	$4.02	28.79
Casella Waste Systems	$1.84 billion	2.95	$7.87 million	$0.11	776.82

Xylem has higher revenue and earnings than Casella Waste Systems. Xylem is trading at a lower price-to-earnings ratio than Casella Waste Systems, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

88.0% of Xylem shares are held by institutional investors. Comparatively, 99.5% of Casella Waste Systems shares are held by institutional investors. 0.3% of Xylem shares are held by insiders. Comparatively, 3.8% of Casella Waste Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Xylem has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Casella Waste Systems has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Xylem and Casella Waste Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xylem	0	7	7	0	2.50
Casella Waste Systems	1	1	8	2	2.92

Xylem presently has a consensus target price of $152.77, indicating a potential upside of 31.98%. Casella Waste Systems has a consensus target price of $111.13, indicating a potential upside of 30.05%. Given Xylem’s higher probable upside, equities research analysts clearly believe Xylem is more favorable than Casella Waste Systems.

Summary

Xylem beats Casella Waste Systems on 9 of the 15 factors compared between the two stocks.

About Xylem

Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions worldwide. It operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. The Water Infrastructure segment offers products, including water, storm water, and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment and rental services under the ADI, Flygt, Godwin, Sanitaire, Magneto, Neptune Benson, Ionpure, Leopold, Wedeco, and Xylem Vue brands. The Applied Water segment provides pumps, valves, heat exchangers, controls, and dispensing equipment systems under the Goulds Water Technology, Bell & Gossett, A-C Fire Pump, Standard Xchange, Lowara, Jabsco, Xylem Vue, and Flojet brands. The Measurement & Control Solutions segment offers smart meters, networked communication devices, data analytics, test equipment, controls, sensor devices, software and managed services, and critical infrastructure services; and software and services, including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management, and pressure monitoring solutions, as well as testing equipment. This segment sells its products under the Pure Technologies, Sensus, Smith Blair, WTW, Xylem Vue, and YSI brands. The Integrated Solutions and Services segment provides maintenance services, mobile services, digital outsourced solutions, wastewater systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, ion exchange, and deionization under Aquapro, WaterOne, and Ion Pure brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in May 2011. Xylem Inc. was incorporated in 2011 and is headquartered in Washington, District of Columbia.

About Casella Waste Systems

Casella Waste Systems, Inc., together with its subsidiaries, operates as a vertically integrated solid waste services company in the United States. It offers resource management services primarily in the areas of solid waste collection and disposal, transfer, recycling, and organics services to residential, commercial, municipal, institutional, and industrial customers. The company provides non-hazardous solid waste services, including collections, transfer stations, recycling, and disposal operations. In addition, it markets materials, including fibers, corrugated cardboard, newsprint, plastics, glass, ferrous, and aluminum metals. Casella Waste Systems, Inc. was founded in 1975 and is headquartered in Rutland, Vermont.