Artesian Resources Corporation (NASDAQ: ARTNA) and The York Water (NASDAQ:YORW) are both small-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares Artesian Resources Corporation and The York Water’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Artesian Resources Corporation 16.58% 9.62% 2.94%
The York Water 25.05% 10.52% 3.73%

Analyst Recommendations

This is a summary of current ratings and price targets for Artesian Resources Corporation and The York Water, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Artesian Resources Corporation 0 1 0 0 2.00
The York Water 0 0 0 0 N/A

Artesian Resources Corporation currently has a consensus price target of $41.00, indicating a potential upside of 11.26%. Given Artesian Resources Corporation’s higher possible upside, equities analysts clearly believe Artesian Resources Corporation is more favorable than The York Water.

Dividends

Artesian Resources Corporation pays an annual dividend of $0.93 per share and has a dividend yield of 2.5%. The York Water pays an annual dividend of $0.64 per share and has a dividend yield of 1.9%. Artesian Resources Corporation pays out 63.3% of its earnings in the form of a dividend. The York Water pays out 68.8% 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. Artesian Resources Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Artesian Resources Corporation has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, The York Water has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Earnings and Valuation

This table compares Artesian Resources Corporation and The York Water’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Artesian Resources Corporation $80.94 million 4.18 $36.76 million $1.47 25.07
The York Water $48.03 million 8.80 $28.97 million $0.93 35.38

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

Insider and Institutional Ownership

39.9% of Artesian Resources Corporation shares are held by institutional investors. Comparatively, 35.4% of The York Water shares are held by institutional investors. 20.6% of Artesian Resources Corporation shares are held by company insiders. Comparatively, 1.1% of The York Water shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Artesian Resources Corporation beats The York Water on 8 of the 14 factors compared between the two stocks.

About Artesian Resources Corporation

Artesian Resources Corporation is a holding company. The Company’s subsidiaries offer water, wastewater and other services on the Delmarva Peninsula. The Company distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in the states of Delaware, Maryland and Pennsylvania. The Company also provides wastewater services to customers in Delaware. In addition, the Company provides contract water and wastewater operations, and water, sewer and internal Service Line Protection Plans. As of December 31, 2016, the Company was the holding company of five regulated public utilities: Artesian Water Company, Inc., Artesian Water Pennsylvania, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc. and Artesian Wastewater Maryland, Inc., and three non-regulated subsidiaries: Artesian Utility Development, Inc., Artesian Development Corporation and Artesian Consulting Engineers, Inc.

About The York Water

The York Water Company is an investor-owned water utility in the United States. The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water. As of December 31, 2016, it also owned and operated three wastewater collection systems and two wastewater treatment systems. As of December 31, 2016, it operated within its territory, which covered 39 municipalities within York County, Pennsylvania and nine municipalities within Adams County, Pennsylvania. Its two wastewater treatment facilities are located in East Manchester and Lower Windsor Townships. It provides sewer billing services. It has a service line protection program, which allows customers to pay a fixed monthly fee, and it will repair or replace damaged customer service lines. As of December 31, 2016, it obtained the bulk of its water supply from both the South Branch and East Branch of the Codorus Creek, which together had a daily flow of 73 million gallons.

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