Head to Head Analysis: Middlesex Water (NASDAQ:MSEX) versus York Water (NASDAQ:YORW)

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

Dividends

Middlesex Water pays an annual dividend of $1.44 per share and has a dividend yield of 2.5%. York Water pays an annual dividend of $0.91 per share and has a dividend yield of 2.9%. Middlesex Water pays out 52.0% of its earnings in the form of a dividend. York Water pays out 54.8% 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. Middlesex Water has increased its dividend for 52 consecutive years and York Water has increased its dividend for 27 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Middlesex Water and York Water, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Middlesex Water	0	3	0	1	2.50
York Water	0	1	0	1	3.00

Middlesex Water presently has a consensus price target of $60.75, indicating a potential upside of 3.37%. York Water has a consensus price target of $31.00, indicating a potential downside of 2.24%. Given Middlesex Water’s higher possible upside, analysts clearly believe Middlesex Water is more favorable than York Water.

Volatility & Risk

Middlesex Water has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, York Water has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Middlesex Water	24.50%	10.08%	3.69%
York Water	28.53%	9.38%	3.47%

Insider & Institutional Ownership

79.5% of Middlesex Water shares are held by institutional investors. Comparatively, 49.9% of York Water shares are held by institutional investors. 1.9% of Middlesex Water shares are held by insiders. Comparatively, 0.5% of York Water shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Middlesex Water and York Water”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Middlesex Water	$194.69 million	5.77	$42.82 million	$2.77	21.22
York Water	$77.49 million	6.64	$20.06 million	$1.66	19.10

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

Summary

Middlesex Water beats York Water on 12 of the 16 factors compared between the two stocks.

About Middlesex Water

Middlesex Water Company is a regulated water utility that provides water and wastewater services. Its operations include sourcing, treating and distributing water, as well as wastewater collection and treatment. Founded in 1897, the company serves customers in New Jersey and Delaware through its regulated utility subsidiaries. Its New Jersey operations focus on central New Jersey, while Tidewater Utilities serves communities in Delaware. Middlesex Water also provides contract operations and maintenance services for municipal and private water and wastewater systems through its subsidiaries.

About York Water

The York Water Company (NASDAQ:YORW) is a regulated water utility serving communities in south-central Pennsylvania. The company provides residential, commercial and industrial customers with treated drinking water through a network of reservoirs, treatment facilities, pipelines and distribution infrastructure. In addition to its water operations, York Water provides wastewater collection and related services in portions of its service territory. Its operations primarily cover York County and extend into surrounding areas, including parts of Adams and Franklin counties.