Critical Survey: Pennon Group (OTCMKTS:PEGRF) and Cadiz (NASDAQ:CDZI)

Pennon Group (OTCMKTS:PEGRF) and Cadiz (NASDAQ:CDZI) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Pennon Group and Cadiz, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pennon Group	0	1	4	0	2.80
Cadiz	1	1	1	0	2.00

Cadiz has a consensus target price of $10.00, indicating a potential upside of 192.40%. Given Cadiz’s higher probable upside, analysts plainly believe Cadiz is more favorable than Pennon Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pennon Group	N/A	N/A	N/A
Cadiz	-311.03%	-206.79%	-26.80%

Earnings and Valuation

This table compares Pennon Group and Cadiz”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pennon Group	N/A	N/A	N/A	$0.29	21.47
Cadiz	$16.31 million	17.76	-$34.15 million	($0.50)	-6.84

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

Institutional & Insider Ownership

44.0% of Pennon Group shares are held by institutional investors. Comparatively, 79.7% of Cadiz shares are held by institutional investors. 2.3% of Cadiz shares are held 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.

Summary

Pennon Group beats Cadiz on 7 of the 11 factors compared between the two stocks.

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.

About Cadiz

Cadiz Inc., together with its subsidiaries, provides water solutions in the United States. The company operates through Land and Water Resources; and Water Filtration Technology segments. It offers water supply, water storage, water conveyance, and water filtration services. In addition, the company is involved in the cultivation of grain crops and alfalfa, as well as provides water filtration solutions for impaired or contaminated groundwater sources. It serves public water systems, government agencies, and other clients. Cadiz Inc. was founded in 1983 and is based in Los Angeles, California.