H2O Innovation (OTCMKTS:HEOFF) and Pure Cycle (NASDAQ:PCYO) Critical Comparison

H2O Innovation (OTCMKTS:HEOFFGet Free Report) and Pure Cycle (NASDAQ:PCYOGet Free Report) are both small-cap utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.


This table compares H2O Innovation and Pure Cycle’s 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%
Pure Cycle 34.68% 5.49% 4.89%

Valuation and Earnings

This table compares H2O Innovation and Pure Cycle’s gross 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
Pure Cycle $14.59 million 15.34 $4.70 million $0.27 34.41

Pure Cycle has lower revenue, but higher earnings than H2O Innovation. H2O Innovation 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 owned by institutional investors. 4.9% of H2O Innovation shares are owned by insiders. Comparatively, 15.9% of Pure Cycle shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

H2O Innovation has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Pure Cycle has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for H2O Innovation and Pure Cycle, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
H2O Innovation 0 0 3 0 3.00
Pure Cycle 0 0 0 0 N/A

H2O Innovation presently has a consensus target price of $3.50, suggesting a potential upside of 12.18%. Given H2O Innovation’s higher probable upside, equities analysts clearly believe H2O Innovation is more favorable than Pure Cycle.


Pure Cycle beats H2O Innovation on 9 of the 13 factors compared between the two stocks.

About H2O Innovation

(Get Free Report)

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 Pure Cycle

(Get Free Report)

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.

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