Reasons to Add Global Water Resources (GWRS) to Your Portfolio
Global Water Resources Inc’s GWRS significant progress in expanding through organic means, acquisitions, utility rate increases and spreading operations in new service areas is expected to drive its performance in the long run. Given its strong dividend history and growth opportunities, GWRS makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2023 earnings per share (EPS) has moved up 24% in the past 60 days to 31 cents. This implies a year-over-year increase of 29.2%.
The Zacks Consensus Estimate for 2023 revenues is pegged at $51.3 million, indicating year-over-year growth of 14.7%.
The company delivered an average earnings surprise of 50.8% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Global Water Resources’ ROE is 13.1%, higher than the industry’s average of 9.7%. This indicates that the company has been utilizing the funds more constructively than its peers in the water supply utility industry.
Long-term Growth and Dividend Yield
Global Water Resources’ long-term (three to five years) earnings growth rate is 15%.
The company’s current dividend yield is 2.35%, better than the Zacks S&P 500 Composite’s 1.43%.
Business Growth
The improving economic condition in Arizona resulted in growing customer base and fresh demand for GWRS’ services.
In February 2023, the company completed the acquisition of Farmers Water Co., a water utility operator with a service area in Sahuarita, AZ. The acquisition added nearly 3,300 active water connections and 21.5 square miles of service area. Since 2017, Global Water Resources has been expanding its operations in the booming Arizona market by acquiring 11 utilities.
Price Performance
In the last three months, the GWRS stock returned 3.6% against the industry’s average 40.6% decline.
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Other Stocks to Consider
A few other top-ranked stocks from the same sector are Consolidated Water Co. Ltd. CWCO, sporting a Zacks Rank #1 (Strong Buy), and Primo Water Corporation PRMW and NiSource Inc. NI, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CWCO’s long-term earnings growth rate is 8%. The consensus estimate for 2023 EPS is pinned at 97 cents, indicating year-over-year growth of 79.6%.
The consensus mark for PRMW’s 2023 EPS is pegged at 79 cents, indicating a year-over-year improvement of 17.9%. The company delivered an average earnings surprise of 0.7% in the last four quarters.
NI’s long-term earnings growth rate is 7%. The consensus estimate for 2023 EPS is pinned at $1.6, implying a year-over-year increase of 8.8%.
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NiSource, Inc (NI) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
Primo Water Corporation (PRMW) : Free Stock Analysis Report
Global Water Resources, Inc. (GWRS) : Free Stock Analysis Report
