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Water Utility Plays Key Role in Curbing Spread of Coronavirus

Zacks Equity Research

Water, as a resource, is integral in the fight back against the spread contagious novel coronavirus.  Per World Health Organization (“WHO”), washing hands with soap at regular intervals is one of the basic measures against coronavirus. If people are avoiding infection through proper hygiene, they are contributing to break the chain of the outbreak, For the same purpose, 24x7 clean-water supply will assist millions of U.S. citizens, quarantined at home, to fight back COVID-19.  

COVID-19 infection is spreading at an alarming rate in the United States as well as globally.  Per Johns Hopkins University and Medicine, this virus has already infected 245,213 people in United States and claimed 5,983 lives. To check the further spread of this virus, guidelines for social distancing will be effective through Apr 30.

How Water Utilities Are Assisting

To limit the spread of COVID-19, clean water is absolutely essential. Per the American Water Works Association report, a significant number of water lines burst in the country everyday due to aging of existing water and wastewater infrastructure. Water main line damages not only disrupt the supply of potable water but also increase the risk of contamination, which can be harmful for consumers. American Water Works AWK and Middlesex Water Company MSEX among others are focused on continuing with repair and upgrade of pipelines. This will enable these companies to distribute potable water and wastewater services to its customers.

Government has asked people to stay at home, which is affecting livelihood. Lockdown and restrictions are creating financial hardships for the common people. Some water utility consumers might face financial hardships to source funds for repaying dues. Financial distress for the unemployed and people in lower income group might get mitigated through the assistance ensured from the $2-trillion economic stimulus package. Even then, water utilities like American Water Works and California Water Service Group have decided to continue providing water and wastewater services to their customers despite their water and wastewater services dues.

We also need to drink water to survive, A report from the United States Environmental Protection Agency, states that drinking water doesn’t contain COVID-19 virus, thus Americans can continue to use and drink water from their tap as usual. Water utilities are consolidating. Major water utilities players with financial strength are making timely investment to upgrade and expand water infrastructure that is ensuring potable water supply to customers across the United States. Essential Utilities, Inc. WTRG has taken essential steps to ensure continuous supply of potable water and natural gas to its customers spread across 10 states of America. Another water utility Artesian Resources Corporation ARTNA, is also encouraging customers to utilize methods that accommodate social distancing.

Zacks Rank & Price Performance

Middlesex Water holds a Zacks Rank #2 (Buy), while American Water Works, Essential Utilities and Artesian Resources carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Six Months

Middlesex Water, American Water Works, Essential Utilities and Artesian Resources registered loss of 10.8%, 6.5%, 11.9% and 3.6%, respectively, in the past six months outperforming the industry’s decline of 14.9%.

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