Head-To-Head Comparison: Middlesex Water (NASDAQ:MSEX) versus Guangdong Investment (OTCMKTS:GGDVY)

Guangdong Investment (OTCMKTS:GGDVY) and Middlesex Water (NASDAQ:MSEX) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Guangdong Investment and Middlesex Water’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Guangdong Investment	N/A	N/A	N/A
Middlesex Water	23.26%	9.59%	3.48%

Insider and Institutional Ownership

0.0% of Guangdong Investment shares are held by institutional investors. Comparatively, 79.5% of Middlesex Water shares are held by institutional investors. 1.9% of Middlesex 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 summary of current recommendations for Guangdong Investment and Middlesex Water, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Guangdong Investment	0	0	0	0	0.00
Middlesex Water	0	1	1	0	2.50

Middlesex Water has a consensus target price of $61.67, suggesting a potential upside of 4.86%. Given Middlesex Water’s stronger consensus rating and higher possible upside, analysts plainly believe Middlesex Water is more favorable than Guangdong Investment.

Earnings and Valuation

This table compares Guangdong Investment and Middlesex Water”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Guangdong Investment	N/A	N/A	N/A	$35.70	1.45
Middlesex Water	$194.69 million	5.69	$42.82 million	$2.59	22.71

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

Dividends

Guangdong Investment pays an annual dividend of $10.76 per share and has a dividend yield of 20.8%. Middlesex Water pays an annual dividend of $1.44 per share and has a dividend yield of 2.4%. Guangdong Investment pays out 30.1% of its earnings in the form of a dividend. Middlesex Water pays out 55.6% 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. Middlesex Water has raised its dividend for 52 consecutive years. Guangdong Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Middlesex Water beats Guangdong Investment on 11 of the 14 factors compared between the two stocks.

About Guangdong Investment

Guangdong Investment Limited, an investment holding company, engages in water resources, property investment and development, department store operation, hotel ownership, energy project operation and management, and road and bridge operation businesses. The company's Water Resources segment provides water distribution, sewage treatment, water pipeline installation and consultancy services, constructs water supply and sewage treatment infrastructure, and sells machineries in Mainland China and Hong Kong. Its Property Investment and Development segment invests in and rents various properties in Hong Kong and Mainland China; and develops and sells properties in Mainland China. This segment provides property management services for various commercial properties. The company's Department Stores Operation segment operates department stores in Mainland China. Its Electric Power Generation segment operates coal-fired power plants that supply electricity and steam in the Guangdong province, Mainland China. The company's Hotel Operation and Management segment operate hotels and provides hotel management services to third parties in Hong Kong and Mainland China. Its Road and Bridge segment invests in various road and bridge projects, which engages in the toll road operation and road management in Mainland China. The company's Others segment provides treasury services in Hong Kong and Mainland China, as well as corporate and other related services. It offers financing, marketing management, environmental engineering, and water technology development and consultation services. The company was formerly known as Union Globe Development Limited and changed its name to Guangdong Investment Limited in January 1987. The company was incorporated in 1973 and is based in Central, Hong Kong. Guangdong Investment Limited operates as a subsidiary of GDH Limited.

About Middlesex Water

Middlesex Water Company owns and operates regulated water utility and wastewater systems. It operates in Regulated and Non-Regulated segments. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers, as well as provides regulated wastewater systems in New Jersey and Delaware. The Non-Regulated segment provides non-regulated contract services for the operation and maintenance of municipal and private water and wastewater systems in New Jersey and Delaware. Middlesex Water Company was incorporated in 1896 and is headquartered in Iselin, New Jersey.