American States Water (NYSE:AWR – Get Free Report) and Severn Trent (OTCMKTS:SVTRF – Get Free Report) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.
Profitability
This table compares American States Water and Severn Trent’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American States Water | 20.24% | 13.10% | 4.62% |
| Severn Trent | N/A | N/A | N/A |
Dividends
American States Water pays an annual dividend of $1.72 per share and has a dividend yield of 2.2%. Severn Trent pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. American States Water pays out 54.4% of its earnings in the form of a dividend. Severn Trent pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American States Water has raised its dividend for 69 consecutive years.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American States Water | $491.53 million | 5.89 | $78.40 million | $3.16 | 24.76 |
| Severn Trent | N/A | N/A | N/A | $0.82 | 38.02 |
American States Water has higher revenue and earnings than Severn Trent. American States Water is trading at a lower price-to-earnings ratio than Severn Trent, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
74.7% of American States Water shares are held by institutional investors. Comparatively, 37.3% of Severn Trent shares are held by institutional investors. 0.8% of American States Water shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings for American States Water and Severn Trent, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American States Water | 1 | 2 | 0 | 0 | 1.67 |
| Severn Trent | 0 | 3 | 3 | 0 | 2.50 |
American States Water currently has a consensus price target of $90.50, suggesting a potential upside of 15.65%. Given American States Water’s higher probable upside, equities research analysts clearly believe American States Water is more favorable than Severn Trent.
Summary
American States Water beats Severn Trent on 10 of the 14 factors compared between the two stocks.
About American States Water
American States Water Company, through its subsidiaries, provides water and electric services to residential, commercial, industrial, and other customers in the United States. It operates through three segments: Water, Electric, and Contracted Services. The company purchases, produces, distributes, and sells water, as well as distributes electricity. As of December 31, 2022, American States Water Company provided water service to 263,265 customers located throughout 10 counties in the State of California; and distributed electricity to 24,705 customers in San Bernardino County mountain communities in California. The company also provides water and/or wastewater services, including the operation, maintenance, and construction of facilities at the water and/or wastewater systems at various military installations. American States Water Company was incorporated in 1929 and is headquartered in San Dimas, California.
About Severn Trent
Severn Trent PLC operates as a water and sewerage company in England and Wales. It operates through two segments: Regulated Water and Waste Water, and Business Services. The Regulated Water and Waste Water segment offers water and waste water services to approximately 4.8 million households and businesses. The Business Services segment generates renewable energy from anaerobic digestion, hydropower, wind turbines, and solar panels; property development; and offers affinity products and search services. It also provides services to municipal and industrial clients, including the Ministry of Defence and the Coal Authority for design, build, and operation of water and wastewater treatment facilities and networks. Severn Trent PLC was founded in 1974 and is headquartered in Coventry, the United Kingdom.
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