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

Profitability

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

Net Margins Return on Equity Return on Assets
SJW Corporation 15.17% 11.96% 3.48%
The York Water 25.05% 10.52% 3.73%

Dividends

SJW Corporation pays an annual dividend of $0.87 per share and has a dividend yield of 1.6%. The York Water pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. SJW Corporation pays out 32.6% 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. The York Water has increased its dividend for 49 consecutive years. The York Water is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SJW Corporation $362.77 million 3.02 $142.70 million $2.67 20.04
The York Water $48.03 million 8.65 $28.97 million $0.93 34.78

SJW Corporation has higher revenue and earnings than The York Water. SJW 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.

Analyst Recommendations

This is a summary of current ratings and price targets for SJW Corporation and The York Water, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SJW Corporation 0 0 1 0 3.00
The York Water 0 0 0 0 N/A

Risk & Volatility

SJW Corporation has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500. Comparatively, The York Water has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Institutional & Insider Ownership

48.3% of SJW Corporation shares are owned by institutional investors. Comparatively, 35.5% of The York Water shares are owned by institutional investors. 21.1% of SJW Corporation shares are owned by insiders. Comparatively, 1.1% of The York Water shares are owned by 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

SJW Corporation beats The York Water on 8 of the 15 factors compared between the two stocks.

About SJW Corporation

SJW Group, formerly SJW Corp., is a holding company. The Company’s subsidiaries include San Jose Water Company, SJWTX, Inc., SJW Land Company and Texas Water Alliance Limited (TWA). SJWTX, Inc. is doing business as Canyon Lake Water Service Company (CLWSC). It operates through the segments, which include Water Utility Services, Real Estate Services and All Other. Its Water Utility Services segment provides water utility and utility-related services to its customers through its subsidiaries, such as San Jose Water Company, CLWSC and TWA. The Real Estate Services segment includes property management and investment activity conducted by SJW Land Company. The Company’s All Other segment includes its other business activities. San Jose Water Company distributes water to customers in accordance with accepted water utility methods. SJW Land Company owns undeveloped land, and owns and operates a portfolio of commercial buildings in the states of California, Texas, Arizona and Tennessee.

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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