Reasons to Add Consolidated Water (CWCO) to Your Portfolio Now
Consolidated Water Co. Ltd.’s CWCO use of Reverse Osmosis, one of the most advanced water purification technologies to convert seawater to potable water at all water treatment plants, boosts its performance. Given its growth opportunities, Consolidated Water makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks #2 Rank (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for CWCO’s 2023 earnings per share (EPS) has moved up 19.2% in the past 60 days to $1.74.
The consensus mark for 2023 sales is pinned at $171.8 million, implying year-over-year growth of 82.6%.
Consolidated Water’s long-term (three to five years) earnings growth rate is 8%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate returns. Currently, the company’s ROE is 13.39%, higher than the industry’s average of 9.32%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility water supply industry.
Debt Position & Liquidity
At the end of third-quarter 2023, Consolidated Water’s total debt to capital was 0.14%, much better than the industry’s average of 47.49%.
The current ratio at the end of the third quarter was 4.14, much higher than the industry’s average of 0.98. The ratio, being greater than one, indicates the company’s ability to meet its future short-term liabilities without difficulties.
Dividend History
Consolidated Water has been consistently paying dividends since 1997 and increasing shareholders’ value. Currently, its quarterly dividend is 9.5 cents per share. This resulted in an annualized dividend of 38 cents per share, 11.8% higher than the previous rate of 34 cents. The company paid a total dividend of $4 million in the first nine months of 2023. Its current dividend yield is 1.08%.
Price Performance
In the past six months, CWCO returned 57.2% against the industry’s average 39.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are American Water Works AWK, American States Water AWR and Global Water Resources GWRS, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AWK’s long-term earnings growth rate is 8.18%. The Zacks Consensus Estimate for 2023 EPS is pegged at $4.82, indicating a year-over-year improvement of 6.9%.
AWR’s long-term earnings growth rate is 6.3%. The consensus mark for 2023 EPS is pinned at $2.98, indicating year-over-year growth of 30.7%.
GWRS’ long-term earnings growth rate is 15%. The company delivered an average earnings surprise of 27.1% in the last four quarters.
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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
Global Water Resources, Inc. (GWRS) : Free Stock Analysis Report
