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Is Consolidated Water Co. Ltd. (NASDAQ:CWCO) Potentially Underrated?

Simply Wall St

I've been keeping an eye on Consolidated Water Co. Ltd. (NASDAQ:CWCO) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CWCO has a lot to offer. Basically, it is a financially-sound , dividend-paying company with an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Consolidated Water here.

Flawless balance sheet with solid track record and pays a dividend

In the past couple of years, CWCO has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, CWCO also outperformed its industry, which delivered a growth of 0.1%. This is an notable feat for the company. CWCO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that CWCO manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at CWCO's capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. CWCO has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.

NasdaqGS:CWCO Income Statement, July 25th 2019

For those seeking income streams from their portfolio, CWCO is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.4%.

NasdaqGS:CWCO Historical Dividend Yield, July 25th 2019

Next Steps:

For Consolidated Water, I've compiled three essential factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for CWCO’s future growth? Take a look at our free research report of analyst consensus for CWCO’s outlook.
  2. Valuation: What is CWCO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CWCO is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CWCO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.