Critical Analysis: California Water Service Group (CWT) vs. Its Peers

California Water Service Group (NYSE: CWT) is one of 15 publicly-traded companies in the “Water supply” industry, but how does it contrast to its rivals? We will compare California Water Service Group to similar businesses based on the strength of its profitability, valuation, earnings, institutional ownership, analyst recommendations, dividends and risk.

Profitability

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This table compares California Water Service Group and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
California Water Service Group 10.07% 9.97% 2.60%
California Water Service Group Competitors 8.09% 8.85% 2.61%

Analyst Ratings

This is a summary of current recommendations and price targets for California Water Service Group and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
California Water Service Group 1 5 0 0 1.83
California Water Service Group Competitors 86 221 250 13 2.33

California Water Service Group currently has a consensus price target of $34.00, indicating a potential downside of 8.11%. As a group, “Water supply” companies have a potential upside of 7.23%. Given California Water Service Group’s rivals stronger consensus rating and higher probable upside, analysts clearly believe California Water Service Group has less favorable growth aspects than its rivals.

Dividends

California Water Service Group pays an annual dividend of $0.75 per share and has a dividend yield of 2.0%. California Water Service Group pays out 53.6% 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. California Water Service Group has increased its dividend for 50 consecutive years.

Insider & Institutional Ownership

70.1% of California Water Service Group shares are held by institutional investors. Comparatively, 49.2% of shares of all “Water supply” companies are held by institutional investors. 1.0% of California Water Service Group shares are held by company insiders. Comparatively, 11.2% of shares of all “Water supply” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares California Water Service Group and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
California Water Service Group $666.89 million $67.18 million 26.43
California Water Service Group Competitors $722.21 million $111.68 million 23.06

California Water Service Group’s rivals have higher revenue and earnings than California Water Service Group. California Water Service Group is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

California Water Service Group has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, California Water Service Group’s rivals have a beta of 0.51, indicating that their average stock price is 49% less volatile than the S&P 500.

Summary

California Water Service Group rivals beat California Water Service Group on 9 of the 15 factors compared.

About California Water Service Group

California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. It is involved in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection. The company offers its services to approximately 484,900 customers in 100 California communities; approximately 4,500 water and wastewater customers on the islands of Maui and Hawaii; approximately 16,800 customers in the Tacoma and Olympia areas in Washington; and approximately 8,100 water and wastewater customers in the Belen, Los Lunas, and Elephant Butte areas in New Mexico. It also engages in the provision of non-regulated water-related services, including operating municipally owned water systems, privately owned water, and recycled water distribution systems; providing operational and maintenance, meter reading, and billing services to private companies and municipalities; leasing communication antenna sites on its properties to telecommunication companies; billing optional third-party insurance programs to its residential customers; and providing lab services. California Water Service Group was founded in 1926 and is headquartered in San Jose, California.

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