Essential Utilities (NYSE:WTRG) and Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) Head to Head Contrast

Essential Utilities (NYSE:WTRG) and Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) are both utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

Essential Utilities has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Companhia de Saneamento Básico do Estado de São Paulo – SABESP has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

65.7% of Essential Utilities shares are held by institutional investors. Comparatively, 11.5% of Companhia de Saneamento Básico do Estado de São Paulo – SABESP shares are held by institutional investors. 0.2% of Essential Utilities shares are held by company insiders. Comparatively, 1.0% of Companhia de Saneamento Básico do Estado de São Paulo – SABESP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Essential Utilities and Companhia de Saneamento Básico do Estado de São Paulo – SABESP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Essential Utilities 25.15% 8.83% 3.36%
Companhia de Saneamento Básico do Estado de São Paulo – SABESP 13.97% 20.46% 9.36%

Dividends

Essential Utilities pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Companhia de Saneamento Básico do Estado de São Paulo – SABESP pays an annual dividend of $0.20 per share and has a dividend yield of 2.5%. Essential Utilities pays out 68.0% of its earnings in the form of a dividend. Essential Utilities has increased its dividend for 1 consecutive years.

Earnings & Valuation

This table compares Essential Utilities and Companhia de Saneamento Básico do Estado de São Paulo – SABESP’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Essential Utilities $889.69 million 12.06 $224.54 million $1.47 29.75
Companhia de Saneamento Básico do Estado de São Paulo – SABESP $4.37 billion 1.25 $853.33 million N/A N/A

Companhia de Saneamento Básico do Estado de São Paulo – SABESP has higher revenue and earnings than Essential Utilities.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Essential Utilities and Companhia de Saneamento Básico do Estado de São Paulo – SABESP, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Essential Utilities 0 1 0 0 2.00
Companhia de Saneamento Básico do Estado de São Paulo – SABESP 0 1 0 0 2.00

Essential Utilities presently has a consensus target price of $50.00, indicating a potential upside of 14.34%. Given Essential Utilities’ higher possible upside, equities analysts clearly believe Essential Utilities is more favorable than Companhia de Saneamento Básico do Estado de São Paulo – SABESP.

Summary

Companhia de Saneamento Básico do Estado de São Paulo – SABESP beats Essential Utilities on 8 of the 14 factors compared between the two stocks.

About Essential Utilities

Essential Utilities, Inc., through its subsidiaries, operates regulated utilities that provide water or wastewater services in the United States. It offers water services through operating and maintenance contracts 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 through a third-party. It serves approximately 3 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, and Virginia. 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.

About Companhia de Saneamento Básico do Estado de São Paulo – SABESP

Companhia de Saneamento Básico do Estado de São Paulo – SABESP provides water and sewage services to residential, commercial, industrial, and governmental customers. It provides water supply, sanitary sewage, urban rainwater management and drainage, urban cleaning, and solid waste management services, as well as related activities, including the planning, operation, maintenance, and commercialization of energy. As of December 31, 2019, the company provided water services through 9.9 million water connections to approximately 27.1 million people; and sewage services through 8.3 million sewage connections to approximately 23.8 million people, as well as operated 81,324 kilometers of water pipes and water transmission lines, and 55,983 kilometers of sewer lines. It also offers water and/or sewage services to other municipalities through special purpose companies. The company was founded in 1954 and is headquartered in São Paulo, Brazil.