Critical Survey: H2O Innovation (OTCMKTS:HEOFF) versus Artesian Resources (NASDAQ:ARTNA)
by Sarita Garza · The Markets DailyH2O Innovation (OTCMKTS:HEOFF – Get Free Report) and Artesian Resources (NASDAQ:ARTNA – Get Free Report) are both small-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Profitability
This table compares H2O Innovation and Artesian Resources’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| H2O Innovation | -0.68% | 5.82% | 2.73% |
| Artesian Resources | 20.18% | 9.37% | 2.75% |
Valuation and Earnings
This table compares H2O Innovation and Artesian Resources”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| H2O Innovation | $189.12 million | 1.48 | -$970,000.00 | ($0.01) | -312.01 |
| Artesian Resources | $112.94 million | 3.26 | $22.82 million | $2.29 | 15.56 |
Artesian Resources has lower revenue, but higher earnings than H2O Innovation. H2O Innovation is trading at a lower price-to-earnings ratio than Artesian Resources, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
57.4% of Artesian Resources shares are held by institutional investors. 4.9% of H2O Innovation shares are held by insiders. Comparatively, 20.6% of Artesian Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations and price targets for H2O Innovation and Artesian Resources, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| H2O Innovation | 0 | 0 | 0 | 0 | 0.00 |
| Artesian Resources | 0 | 2 | 0 | 0 | 2.00 |
Volatility and Risk
H2O Innovation has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Artesian Resources has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.
Summary
Artesian Resources beats H2O Innovation on 10 of the 12 factors compared between the two stocks.
About H2O Innovation
H2O Innovation Inc. designs and provides integrated water treatment solutions based on membrane filtration technology. It operates through three segments: Water Technologies and Services, Specialty Products, and Operation and Maintenance Services. The company offers membrane filtration technology for municipal, industrial, energy, and natural resources end-users; and aftersales services, as well as digital solutions to monitor and optimize water treatment plants. Its products include the FiberFlex open-source technologies for water treatment systems; the flexMBR for wastewater treatment systems; SILO system for wastewater and water reuse treatment; and FlexBox, a mobile fleet of water and wastewater treatment systems, such as containerized ultrafiltration or reverse osmosis (RO) systems. The company also offers specialty chemicals, consumables, and specialized products for the water industry, including RO membrane chemicals, such as antiscalants, flocculants, biocides, and cleaning chemicals; corrosion resistant equipment for desalination plants; flexible grooved-end couplings, fiberglass reinforced polyester cartridge filter housings, self-cleaning disc and screen filters, bag filters, cartridges, and strainers; and maple farming equipment. In addition, it operates, maintains, and repairs water and wastewater treatment systems, distribution equipment, and associated assets. The company was incorporated in 1995 and is headquartered in Quebec City, Canada. As of December 8, 2023, H2O Innovation Inc. was taken private.
About Artesian Resources
Artesian Resources Corporation, through its subsidiaries, provides water, wastewater, and other services in Delaware, Maryland, and Pennsylvania. The company distributes and sells water to residential, commercial, industrial, governmental, municipal, and utility customers, as well as for public and private fire protection in the states of Delaware, Maryland, and Pennsylvania; and offers wastewater collection, treatment infrastructure, and wastewater services to customers in Delaware. It also provides contract water and wastewater services; water, sewer, and internal service line protection plans; and wastewater management services, as well as design, construction, and engineering services. In addition, the company offers services to other water utilities, including operations and billing functions; owns real estate properties, including land for office buildings, a water treatment plant, and wastewater facility; and provides design, installation, maintenance, and repair services related to existing or proposed storm water management systems. As of December 31, 2023, it served approximately 95,900 customers in Delaware; 2,600 customers in Maryland; and 40 customers in Pennsylvania through 1,470 miles of transmission and distribution mains. Artesian Resources Corporation was founded in 1905 and is headquartered in Newark, Delaware.