Contrasting Guangdong Investment (OTCMKTS:GGDVY) and H2O America (NASDAQ:HTO)

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

Insider and Institutional Ownership

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

Valuation and Earnings

This table compares H2O America and Guangdong Investment”s 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	2.30	$93.97 million	$3.05	16.00
Guangdong Investment	N/A	N/A	N/A	$35.70	1.35

H2O America has higher revenue and earnings than Guangdong Investment. Guangdong Investment 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 Guangdong Investment’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%
Guangdong Investment	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for H2O America and Guangdong Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H2O America	0	1	1	0	2.50
Guangdong Investment	0	0	0	0	0.00

H2O America presently has a consensus target price of $56.50, indicating a potential upside of 15.80%. Given H2O America’s stronger consensus rating and higher probable upside, equities research analysts plainly believe H2O America is more favorable than Guangdong Investment.

Dividends

H2O America pays an annual dividend of $1.68 per share and has a dividend yield of 3.4%. Guangdong Investment pays an annual dividend of $10.76 per share and has a dividend yield of 22.4%. H2O America pays out 55.1% of its earnings in the form of a dividend. Guangdong Investment pays out 30.1% 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. Guangdong Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

H2O America beats Guangdong Investment 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 Guangdong Investment

Guangdong Investment Limited, an investment holding company, engages in water resources, property investment and development, department store operation, hotel ownership, energy project operation and management, and road and bridge operation businesses. The company's Water Resources segment provides water distribution, sewage treatment, water pipeline installation and consultancy services, constructs water supply and sewage treatment infrastructure, and sells machineries in Mainland China and Hong Kong. Its Property Investment and Development segment invests in and rents various properties in Hong Kong and Mainland China; and develops and sells properties in Mainland China. This segment provides property management services for various commercial properties. The company's Department Stores Operation segment operates department stores in Mainland China. Its Electric Power Generation segment operates coal-fired power plants that supply electricity and steam in the Guangdong province, Mainland China. The company's Hotel Operation and Management segment operate hotels and provides hotel management services to third parties in Hong Kong and Mainland China. Its Road and Bridge segment invests in various road and bridge projects, which engages in the toll road operation and road management in Mainland China. The company's Others segment provides treasury services in Hong Kong and Mainland China, as well as corporate and other related services. It offers financing, marketing management, environmental engineering, and water technology development and consultation services. The company was formerly known as Union Globe Development Limited and changed its name to Guangdong Investment Limited in January 1987. The company was incorporated in 1973 and is based in Central, Hong Kong. Guangdong Investment Limited operates as a subsidiary of GDH Limited.