Critical Review: Connecticut Water Service (CTWS) versus The Competition

Connecticut Water Service (NASDAQ: CTWS) is one of 15 public companies in the “Water supply” industry, but how does it compare to its rivals? We will compare Connecticut Water Service to related businesses based on the strength of its institutional ownership, risk, earnings, analyst recommendations, valuation, profitability and dividends.

Analyst Ratings

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This is a breakdown of current ratings and target prices for Connecticut Water Service and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Connecticut Water Service 0 1 0 0 2.00
Connecticut Water Service Competitors 86 218 244 13 2.33

Connecticut Water Service presently has a consensus price target of $57.00, suggesting a potential downside of 4.20%. As a group, “Water supply” companies have a potential upside of 10.46%. Given Connecticut Water Service’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Connecticut Water Service has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares Connecticut Water Service and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Connecticut Water Service $113.85 million $25.05 million 26.33
Connecticut Water Service Competitors $722.21 million $111.68 million 22.61

Connecticut Water Service’s rivals have higher revenue and earnings than Connecticut Water Service. Connecticut Water Service is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

47.8% of Connecticut Water Service shares are held by institutional investors. Comparatively, 49.2% of shares of all “Water supply” companies are held by institutional investors. 2.5% of Connecticut Water Service shares are held by company insiders. Comparatively, 11.1% of shares of all “Water supply” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Connecticut Water Service pays an annual dividend of $1.19 per share and has a dividend yield of 2.0%. Connecticut Water Service pays out 52.7% of its earnings in the form of a dividend. As a group, “Water supply” companies pay a dividend yield of 2.2% and pay out 53.9% of their earnings in the form of a dividend. Connecticut Water Service has increased its dividend for 48 consecutive years.

Risk & Volatility

Connecticut Water Service has a beta of -0.06, indicating that its stock price is 106% less volatile than the S&P 500. Comparatively, Connecticut Water Service’s rivals have a beta of 0.51, indicating that their average stock price is 49% less volatile than the S&P 500.

Profitability

This table compares Connecticut Water Service and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Connecticut Water Service 21.04% 9.62% 3.00%
Connecticut Water Service Competitors 8.09% 8.85% 2.61%

Summary

Connecticut Water Service rivals beat Connecticut Water Service on 10 of the 15 factors compared.

Connecticut Water Service Company Profile

Connecticut Water Service, Inc., together with its subsidiaries, operates as a regulated water company. The company operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Operations segment supplies public drinking water. The Real Estate Transactions segment is involved in the sale or donation of its real estate holdings. The Services and Rentals segment provides contracted services to water and wastewater utilities, and other clients. Its services include contract operations of water and wastewater facilities; Linebacker, a service line protection plan for public drinking water customers; and providing bulk deliveries of emergency drinking water to businesses and residences through tanker trucks. This segment also leases and rents residential and commercial properties to third parties. As of December 31, 2017, the company supplied water to 135,645 customers in 80 municipalities in Connecticut and Maine, the United States. Connecticut Water Service, Inc. was founded in 1956 and is headquartered in Clinton, Connecticut.

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