Analyzing Manila Water (OTCMKTS:MWTCY) and Essential Utilities (NYSE:WTRG)

Manila Water (OTCMKTS:MWTCYGet Free Report) and Essential Utilities (NYSE:WTRGGet Free Report) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings for Manila Water and Essential Utilities, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manila Water 0 0 0 0 N/A
Essential Utilities 0 0 5 0 3.00

Essential Utilities has a consensus target price of $48.25, indicating a potential upside of 37.74%. Given Essential Utilities’ higher possible upside, analysts clearly believe Essential Utilities is more favorable than Manila Water.

Valuation & Earnings

This table compares Manila Water and Essential Utilities’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Manila Water N/A N/A N/A C$58.75 0.13
Essential Utilities $2.28 billion 4.20 $465.24 million $1.80 19.46

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

Dividends

Manila Water pays an annual dividend of C$6.40 per share and has a dividend yield of 83.5%. Essential Utilities pays an annual dividend of $1.22 per share and has a dividend yield of 3.5%. Manila Water pays out 10.9% of its earnings in the form of a dividend. Essential Utilities pays out 67.8% 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. Essential Utilities has increased its dividend for 31 consecutive years. Manila Water is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Manila Water and Essential Utilities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manila Water N/A N/A N/A
Essential Utilities 20.95% 8.52% 2.98%

Insider and Institutional Ownership

0.0% of Manila Water shares are owned by institutional investors. Comparatively, 73.0% of Essential Utilities shares are owned by institutional investors. 0.2% of Essential Utilities shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Essential Utilities beats Manila Water on 10 of the 13 factors compared between the two stocks.

About Manila Water

(Get Free Report)

Manila Water Company, Inc., together with its subsidiaries, provides water treatment and distribution, sewerage, and sanitation services in the Philippines and internationally. It also offers integrated used water, pipework, engineering, procurement, and management services. The company provides its services to approximately six million people in the East Zone encompassing 23 cities and municipalities, including Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, Quezon City, and Manila, as well as Rizal towns comprising Angono, Antipolo, Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, San Mateo, Tanay, Taytay, and Teresa. It serves residential, commercial, semi-business, and industrial customers. The company was incorporated in 1997 and is based in Quezon City, the Philippines.

About Essential Utilities

(Get Free Report)

Essential Utilities, Inc., through its subsidiaries, operates regulated utilities that provide water, wastewater, or natural gas services in the United States. The company operates through Regulated Water and Regulated Natural Gas segments. It offers water services through operating and maintenance contract with municipal authorities and other parties. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry; and water and sewer line protection solutions, and repair services to households. It serves approximately 8.8 million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky under the Aqua and Peoples brands. The company was formerly known as Aqua America, Inc. and changed its name to Essential Utilities, Inc. in February 2020. Essential Utilities, Inc. was founded in 1886 and is headquartered in Bryn Mawr, Pennsylvania.

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