Companhia de Saneamento Basico (SBS) versus Its Rivals Critical Survey

Companhia de Saneamento Basico (NYSE: SBS) is one of 15 publicly-traded companies in the “Water supply” industry, but how does it compare to its competitors? We will compare Companhia de Saneamento Basico to related businesses based on the strength of its risk, dividends, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Volatility and Risk

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Companhia de Saneamento Basico has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500. Comparatively, Companhia de Saneamento Basico’s competitors have a beta of 0.51, meaning that their average stock price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares Companhia de Saneamento Basico and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Companhia de Saneamento Basico $4.58 billion $789.53 million 8.45
Companhia de Saneamento Basico Competitors $722.21 million $111.68 million 23.07

Companhia de Saneamento Basico has higher revenue and earnings than its competitors. Companhia de Saneamento Basico is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Companhia de Saneamento Basico and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Companhia de Saneamento Basico 17.29% 14.98% 6.67%
Companhia de Saneamento Basico Competitors 8.09% 8.85% 2.61%

Institutional and Insider Ownership

16.2% of Companhia de Saneamento Basico shares are held by institutional investors. Comparatively, 49.4% of shares of all “Water supply” companies are held by institutional investors. 1.0% of Companhia de Saneamento Basico shares are held by company insiders. Comparatively, 11.1% of shares of all “Water supply” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Companhia de Saneamento Basico pays an annual dividend of $0.29 per share and has a dividend yield of 3.0%. Companhia de Saneamento Basico pays out 25.0% of its earnings in the form of a dividend. As a group, “Water supply” companies pay a dividend yield of 2.2% and pay out 53.9% of their earnings in the form of a dividend. Companhia de Saneamento Basico is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and target prices for Companhia de Saneamento Basico and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Companhia de Saneamento Basico 1 3 1 0 2.00
Companhia de Saneamento Basico Competitors 86 221 250 13 2.33

As a group, “Water supply” companies have a potential upside of 5.77%. Given Companhia de Saneamento Basico’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Companhia de Saneamento Basico has less favorable growth aspects than its competitors.

Summary

Companhia de Saneamento Basico beats its competitors on 8 of the 15 factors compared.

Companhia de Saneamento Basico Company Profile

Companhia de Saneamento Basico do Estado de Sao Paulo-SABESP is a water and sewage service provider. The Company provides water and sewage services to a range of residential, commercial, industrial and governmental customers in over 360 municipalities in the state of Sao Paulo, including the city of Sao Paulo. The Company’s segments include Water and Sewage. The Company also supplies treated water on a wholesale basis to approximately 10 municipalities located in the Sao Paulo metropolitan region and urban conurbations. The Company’s activities comprise water supply, sanitary sewage services, urban rainwater management and drainage services, urban cleaning services, solid waste management services and related activities, including the planning, operation, maintenance and commercialization of energy, and the commercialization of services, products, benefits and rights that directly or indirectly arise from its assets, operations and activities.

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