Reviewing H2O America (NASDAQ:HTO) & Manila Water (OTCMKTS:MWTCY)

H2O America (NASDAQ:HTO) and Manila Water (OTCMKTS:MWTCY) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation & Earnings

This table compares H2O America and Manila Water”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H2O America	$748.44 million	2.34	$93.97 million	$3.05	16.30
Manila Water	N/A	N/A	N/A	C$58.75	0.30

H2O America has higher revenue and earnings than Manila Water. Manila Water is trading at a lower price-to-earnings ratio than H2O America, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares H2O America and Manila Water’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H2O America	13.03%	7.67%	2.27%
Manila Water	N/A	N/A	N/A

Dividends

H2O America pays an annual dividend of $1.68 per share and has a dividend yield of 3.4%. Manila Water pays an annual dividend of C$6.40 per share and has a dividend yield of 36.8%. H2O America pays out 55.1% of its earnings in the form of a dividend. Manila Water pays out 10.9% 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. H2O America has raised its dividend for 57 consecutive years. Manila Water is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for H2O America and Manila Water, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H2O America	0	1	1	0	2.50
Manila Water	0	0	0	0	0.00

H2O America presently has a consensus target price of $56.50, indicating a potential upside of 13.61%. Given H2O America’s stronger consensus rating and higher possible upside, research analysts clearly believe H2O America is more favorable than Manila Water.

Insider and Institutional Ownership

84.3% of H2O America shares are owned by institutional investors. Comparatively, 0.0% of Manila Water shares are owned by institutional investors. 0.4% of H2O America shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

H2O America beats Manila Water on 11 of the 14 factors compared between the two stocks.

About H2O America

SJW Group, through its subsidiaries, provides water utility and other related services in the United States. It operates in Water Utility Services and Real Estate Services segments. The company engages in the production, purchase, storage, purification, distribution, wholesale, and retail sale of water and wastewater services; and supplies groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the Santa Clara Valley Water District. It also offers non-tariffed services, including water system operations, maintenance agreements, and antenna site leases; contracted services, sewer operations, and other water related services to water utilities; and a Linebacker protection plan for public drinking water customers in Connecticut and Maine. In addition, the company provides water service to approximately 232,400 connections that serve approximately one million people residing in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos; adjacent unincorporated territories in the County of Santa Clara in the State of California; water service to approximately 141,000 service connections, which serve approximately 461,000 people in 81 municipalities with a service area of approximately 272 square miles in Connecticut and Maine and approximately 3,000 wastewater connections in Southbury, Connecticut; approximately 28,000 service connections that serve approximately 83,000 people in a service area comprising approximately 271 square miles in the region between San Antonio and Austin, Texas; and approximately 950 wastewater connections. Further, it owns undeveloped land in California and Tennessee; commercial and warehouse properties in Tennessee; and commercial properties and parcels of land in Connecticut. The company was formerly known as SJW Corp. and changed its name to SJW Group in November 2016. SJW Group was incorporated in 1985 and is headquartered in San Jose, California.

About Manila Water

Manila Water Company, Inc., together with its subsidiaries, provides water treatment and distribution, sewerage, and sanitation services in the Philippines and internationally. The company offers integrated used water, pipework, engineering, procurement, and management services. It also provides its services to people in the East Zone encompassing cities and municipalities, including Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, Quezon City, and Manila, as well as Rizal towns comprising Angono, Antipolo, Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, San Mateo, Tanay, Taytay, and Teresa. The company serves residential, commercial, semi-business, and industrial customers. Manila Water Company, Inc. was incorporated in 1997 and is based in Quezon City, the Philippines.