Critical Review: Pure Cycle (NASDAQ:PCYO) & Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS)

Pure Cycle (NASDAQ:PCYO) and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Risk & Volatility

Pure Cycle has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Pure Cycle and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pure Cycle	0	0	1	0	3.00
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp	0	1	2	0	2.67

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp has a consensus target price of $183.00, suggesting a potential upside of 3,822.83%. Given Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp’s higher possible upside, analysts plainly believe Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp is more favorable than Pure Cycle.

Earnings and Valuation

This table compares Pure Cycle and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pure Cycle	$26.09 million	9.84	$13.11 million	$0.61	17.46
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp	$40.88 billion	0.40	$1.52 billion	$0.36	12.96

Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp has higher revenue and earnings than Pure Cycle. Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp is trading at a lower price-to-earnings ratio than Pure Cycle, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

51.4% of Pure Cycle shares are held by institutional investors. Comparatively, 10.6% of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp shares are held by institutional investors. 6.1% of Pure Cycle shares are held by insiders. Comparatively, 1.0% of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Pure Cycle and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pure Cycle	43.66%	9.98%	8.75%
Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp	23.93%	14.03%	5.59%

Summary

Pure Cycle beats Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp on 9 of the 14 factors compared between the two stocks.

About Pure Cycle

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of 930-acre master-planned community; oil and gas leasing business; and construction and leasing of single-family homes. It serves domestic, commercial, and industrial customers in the Eastern Denver metropolitan region. Pure Cycle Corporation was incorporated in 1976 and is based in Watkins, Colorado.

About Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp

Companhia de Saneamento Basico do Estado de Sao Paulo SABESP engages in the provision of water and sewage service. It also offers advisory services on the rational use of water, planning and commercial, and financial and operational management. The company was founded on September 6, 1973 and is headquartered in São Paulo, Brazil.