Reasons to Add California Water (CWT) to Your Portfolio
California Water Service Group CWT provides regulated and non-regulated water and wastewater services to its customers. The company’s expanding operations through acquisitions and investments in infrastructure will drive its performance.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for CWT’s 2023 earnings per share (EPS) is pegged at $1.91, increasing 3.2% in the past 60 days.
The Zacks Consensus Estimate for 2024 EPS is pegged at $2.17, increasing 2.8% in the past 60 days.
Debt Position
California Water’s total debt to capital was 45.93% as of Jun 30, 2023, better than the industry’s average of 55.14%.
The time-to-interest earned ratio at the end of second-quarter 2023 was 2.2. The ratio, being greater than one, reflects California Water’s ability to meet future debt obligations without difficulties.
Dividend History
The utility company has been consistently paying dividends to its shareholders. It has been increasing dividends every year since the inception of the payment. California Water declared a quarterly dividend of 26 cents per share in July 2023, resulting in an annual payout of $1.04.
This marks the 314th consecutive quarterly dividend to be paid by the company to its shareholders. CWT’s current dividend yield is 2.15%, better than the Zacks S&P 500 Composite’s 1.76%.
Systematic Investments
California Water’s primary focus is to expand operations in the western United States. The company invested $177.2 million in capital improvements during the first six months of 2023 and expects capital expenditure for 2023 and 2024 to be at $360 million and $365 million, respectively.
Price Performance
In the past six months, shares of CWT have lost 20% compared with the broader industry’s 48.6% decline.
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Other Stocks to Consider
A few other top-ranked stocks in the same industry are Consolidated Water Co. Ltd. CWCO, SJW Group SJW and American States Water Co. AWR. CWCO sports a Zacks Rank of #1 (Strong Buy), while SJW and AWR carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Consolidated Water’s long-term (three-to five-years) earnings growth rate is 8%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.46, implying a year-over-year improvement of 170.4%.
The Zacks Consensus Estimate for SJW’s 2023 EPS is pegged at $2.47, implying a year-over-year improvement of 2.1%. The stock delivered an average earnings surprise of 20.97% in the last four quarters.
American States Water’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS is pegged at $2.96, implying a year-over-year improvement of 29.8%.
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California Water Service Group (CWT) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
SJW Group (SJW) : Free Stock Analysis Report
