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Why You Should Add York Water (YORW) to Your Portfolio Now

Zacks Equity Research

The York Water Company’s YORW ongoing investments to build and improve infrastructure, steady dividend payments, as well as upward estimate revisions make it a good investment candidate.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projections

The Zacks Consensus Estimate for 2020 earnings per share and revenues is pegged at $1.21 and $53.5 million, suggesting an increase of 9% and 3.8%, respectively, from the year-ago quarter.

The consensus mark for 2022 earnings and revenues is pegged at $1.25 and $56 million, respectively. The bottom- and top-line estimates suggest 3.7% and 4.6% year-over-year increase, respectively.

Surprise History

York Water’s four-quarter positive earnings surprise is 13.6%, on average.

Price Performance

In the past 12-month period, the stock has gained 24.1% compared with the industry’s growth of 2.8%.

Debt to Capital & Credit Rating

The company’s debt to capital is 42.66%, which is lower than the industry average of 48.57%. This indicates that it is efficiently managing operations via utilizing lesser debt than peers. Its times interest earned ratio at the end of first-quarter 2020 was 4.5, which suggests that the company has enough financial flexibility to meet debt obligations in the near term without any difficulties.

At first quarter-end, Standard & Poor’s affirmed the company’s credit rating at A-, with a stable outlook and adequate liquidity.  

Regular Investments

During 2019, York Water invested $18.4 million in routine items, dam improvements, and various replacements and improvements of infrastructure. For 2020 and 2021, the company has plans to invest $29.5 million and $27 million, respectively, excluding the acquisitions not yet approved. Investments to strengthen the existing infrastructure and the acquisition of new assets will expand its footprint and the customer base.

Other Stocks to Consider

Other top-ranked stocks in the Utilities sector include Middlesex Water Company MSEX, American States Water Company AWR and NewJersey Resources Corporation NJR. While Middlesex Water sports a Zacks Rank #1, the other two companies carry a Zacks Rank of 2.

Middlesex Water delivered average positive earnings surprise of 2.2% in the last four quarters. Long-term (three to five years) earnings growth for American States Water and NewJersey Resources is currently projected at 4.9% and 6%, respectively.

The Zacks Consensus Estimate for 2020 earnings for Middlesex Water, American States Water, and NewJersey Resources has moved 1%, 1.8%, and 0.5% upward, respectively, in the past 60 days.

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The York Water Company (YORW) : Free Stock Analysis Report
Middlesex Water Company (MSEX) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
NewJersey Resources Corporation (NJR) : Free Stock Analysis Report
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