Analyzing Pennon Group (OTCMKTS:PEGRY) and Consolidated Water (NASDAQ:CWCO)

Consolidated Water (NASDAQ:CWCO) and Pennon Group (OTCMKTS:PEGRY) are both utilities companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Dividends

Consolidated Water pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Pennon Group pays an annual dividend of $0.17 per share and has a dividend yield of 1.2%. Consolidated Water pays out 29.9% of its earnings in the form of a dividend. Pennon Group pays out 29.4% 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.

Profitability

This table compares Consolidated Water and Pennon Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consolidated Water	23.26%	15.49%	13.67%
Pennon Group	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current recommendations for Consolidated Water and Pennon Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consolidated Water	0	0	0	0	N/A
Pennon Group	0	0	0	0	N/A

Insider and Institutional Ownership

55.2% of Consolidated Water shares are owned by institutional investors. 5.9% of Consolidated Water shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Consolidated Water and Pennon Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consolidated Water	$175.27 million	2.21	$29.58 million	$1.47	16.63
Pennon Group	N/A	N/A	N/A	$0.58	24.95

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

Summary

Consolidated Water beats Pennon Group on 8 of the 10 factors compared between the two stocks.

About Consolidated Water

Consolidated Water Co. Ltd., together with its subsidiaries, designs, constructs, manages, and operates water production and water treatment plants primarily in the Cayman Islands, the Bahamas, and the United States. The company operates through four segments: Retail, Bulk, Services, and Manufacturing. The company produces potable water from seawater utilizing reverse osmosis technology and supply water to end-users, including residential, commercial, and government customers, as well as government-owned distributors. It offers design, engineering, construction, procurement, and management services for desalination projects and water treatment plants, as well as management and engineering services relating to municipal water distribution and treatment. In addition, the company manufactures and services a range of water-related products, including reverse osmosis desalination equipment, membrane separation equipment, filtration equipment, piping systems, vessels, and custom fabricated components; and provides design, engineering, consulting, management, inspection, training, and equipment maintenance services for commercial, municipal, and industrial water production, supply, and treatment, as well as desalination and wastewater treatment. Consolidated Water Co. Ltd. was incorporated in 1973 and is headquartered in Grand Cayman, the Cayman Islands.

About Pennon Group

Pennon Group Plc provides clean water and wastewater services in the United Kingdom. It provides water and wastewater services for customers in Cornwall, Devon, and parts of Dorset and Somerset; water-only services in the areas of Dorset, Hampshire, and Wiltshire; and water and wastewater retail services to non-household customers in Great Britain. The company also offers regulated water to approximately 1.2 million customers in the Bristol region. Pennon Group Plc was incorporated in 1989 and is based in Exeter, the United Kingdom.