Critical Survey: American Energy Partners (OTCMKTS:AEPTD) versus Essential Utilities (NYSE:WTRG)

American Energy Partners (OTCMKTS:AEPTD) and Essential Utilities (NYSE:WTRG) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings for American Energy Partners and Essential Utilities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Energy Partners	0	0	0	0	N/A
Essential Utilities	0	0	4	0	3.00

Essential Utilities has a consensus price target of $43.00, suggesting a potential upside of 16.09%. Given Essential Utilities’ higher probable upside, analysts clearly believe Essential Utilities is more favorable than American Energy Partners.

Valuation and Earnings

This table compares American Energy Partners 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
American Energy Partners	N/A	N/A	N/A	N/A	N/A
Essential Utilities	$2.05 billion	4.93	$498.23 million	$1.86	19.91

Essential Utilities has higher revenue and earnings than American Energy Partners.

Profitability

This table compares American Energy Partners and Essential Utilities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Energy Partners	N/A	N/A	N/A
Essential Utilities	24.26%	8.68%	3.06%

Volatility and Risk

American Energy Partners has a beta of 2.92, meaning that its stock price is 192% more volatile than the S&P 500. Comparatively, Essential Utilities has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Insider and Institutional Ownership

74.8% 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Essential Utilities beats American Energy Partners on 8 of the 9 factors compared between the two stocks.

About American Energy Partners

American Energy Partners, Inc., through its subsidiaries, sources, treats, and distributes reclaimed water in the United States. The company engages in the design, construction, and operation of regional water treatment facilities that serve industrial, energy, and government sectors. It also focuses on drilling, operating, and partnership opportunities in the upstream oil and gas space. It also provides geotechnical services. The company is based in Allentown, Pennsylvania.

About Essential Utilities

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. In addition, the company provides utility service line protection solutions and repair services to households. It serves approximately 5.5 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, 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.