Pure Cycle Corporation (NASDAQ: PCYO) and AquaVenture Holdings (NASDAQ:WAAS) are both small-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Profitability

This table compares Pure Cycle Corporation and AquaVenture Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pure Cycle Corporation -238.22% -2.45% -2.37%
AquaVenture Holdings -21.12% -6.72% -4.64%

Insider and Institutional Ownership

67.0% of Pure Cycle Corporation shares are owned by institutional investors. 4.6% of Pure Cycle Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for Pure Cycle Corporation and AquaVenture Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pure Cycle Corporation 0 0 1 0 3.00
AquaVenture Holdings 0 0 4 1 3.20

AquaVenture Holdings has a consensus price target of $27.00, indicating a potential upside of 72.63%. Given AquaVenture Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe AquaVenture Holdings is more favorable than Pure Cycle Corporation.

Earnings & Valuation

This table compares Pure Cycle Corporation and AquaVenture Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pure Cycle Corporation $719,142.00 247.73 -$1.65 million N/A N/A
AquaVenture Holdings $115.98 million 3.56 $15.78 million N/A N/A

AquaVenture Holdings has higher revenue and earnings than Pure Cycle Corporation.

Summary

AquaVenture Holdings beats Pure Cycle Corporation on 7 of the 12 factors compared between the two stocks.

About Pure Cycle Corporation

Pure Cycle Corporation is an integrated water company that provides wholesale water and wastewater services. The Company provides its services to wholesale customers, which include industrial customers and local governmental entities that provide water and wastewater services to their end-use customers located in the Denver, Colorado metropolitan area. The Company is engaged in selling water service to customers, using water rights owned or controlled by the Company and developing infrastructure to divert, treat and distribute that water and collect, treat and reuse wastewater. The Company owns a portfolio of water rights located in the Denver, Colorado metropolitan area, Southeastern Colorado in the Arkansas River, and the Western Slope of Colorado in the Colorado River. The Company’s Denver area assets include Rangeview Water, the Lowry Range Property, Sky Ranch and Arapahoe County Fairgrounds.

About AquaVenture Holdings

AquaVenture Holdings Limited is a multinational provider of Water-as-a-Service solutions. The Company’s segments are Seven Seas Water and Quench. The Seven Seas Water segment provides outsourced desalination solutions and wastewater treatment for governmental, municipal, industrial and hospitality customers. The Quench segment provides bottleless filtered water coolers and other products that use filtered water as an input, such as ice machines, sparkling water dispensers and coffee brewers, to customers throughout the United States typically under multi-year contracts. The Company’s solutions utilize seawater reverse osmosis and other purification technologies to produce potable and industrial process water in high volumes for customers operating in regions with limited access to potable water. As of December 31, 2016, it operated 10 water treatment facilities in the Caribbean region and South America producing approximately eight billion gallons of purified water per year.

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