Reasons to Add Global Water Resources (GWRS) to Your Portfolio
Global Water Resources Inc.’s GWRS strategic investments, expansion through organic means, acquisitions and spreading operations in new service areas will further drive its performance. Given its growth opportunities, GWRS makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 3.3% in the past seven days to 31 cents.
GWRS’ long-term (three-to-five years) earnings growth rate is 15%. The company delivered an average earnings surprise of 28.8% 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 13.64%, higher than the industry’s average of 9.62%. This indicates that the company has been utilizing the funds more constructively than its peers in the water supply utility industry.
Solvency
The times interest earned ratio is a solvency ratio. It is used to measure how well the company can cover its interest obligations. The time to interest earned ratio at the end of fourth-quarter 2023 was 3.2, which being greater than one indicates that GWRS is in a good position to meet its interest obligations.
Dividend History
GWRS has consistently increased the value of its stockholders by paying dividends. Currently, its monthly cash dividend is 2.508 cents per share, resulting in an annualized dividend of 30.1 cents. The company’s current dividend yield is 2.44%, better than the Zacks S&P 500 Composite's average of 1.32%.
Business Growth
The company expects to increase its long-term investments in existing utilities to boost revenues, reduce expenses and build a rate base to provide safe, reliable services. During the fourth quarter of 2023, the company invested $3.7 million in infrastructure projects to support existing utilities and continued growth. For the full year, it invested $22.3 million in infrastructure projects.
The improving economic condition in Arizona resulted in a growing customer base and fresh demand for GWRS’ services. The company has invested $76.3 billion of capital in Arizona during 2021-2023, which indicates an increase of 274% over the preceding three years.
Price Performance
In the last six months, the GWRS stock returned 15.2% against the industry’s 4.7% 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 Consolidated Water CWCO, each presently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AWK’s long-term earnings growth rate is 7.76%. The company delivered an average earnings surprise of 6% in the last four quarters.
AWR’s long-term earnings growth rate is 6.3%. The company delivered an average earnings surprise of 6% in the last four quarters.
CWCO’s long-term earnings growth rate is 8%. It delivered an average earnings surprise of 61.6% 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
