On Dec 25, 2013, Zacks Investment Research upgraded
Connecticut Water Service Inc.
) to a Zacks Rank #1 (Strong Buy).
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CALIF WATER SVC (CWT): Free Stock Analysis
MIDDLESEX WATER (MSEX): Free Stock Analysis
To read this article on Zacks.com click here.
Why the Upgrade?
Connecticut Water Service reported positive earnings surprises in
3 out of the past 4 quarters with an earnings beat of 7.9%. In
the third quarter of 2013, the company reported earnings of 86
cents per share, beating the Zacks Consensus Estimate by 24.6%.
Quarterly earnings were 28.3% higher than the year-ago figure,
primarily on the back of solid performance from its Water
In Jul 2013, Connecticut Water Service received approval for the
two-year rate reduction and introduction of the Revenue
Adjustment Mechanism ("RAM"). The company will implement these
initiatives from Apr 2014. The company believes these initiatives
will help retain existing customers.
In Nov 2013, the company announced its 2014 capital expenditure
guidance of $45.6 million, up 45.7% from the 2013 capital
spending projection. These figures suggest that Connecticut Water
Service continues to increase its capital expenditure.
We believe that the continuous rise in capital spending is geared
towards improving the water utility's infrastructure. The
addition of new assets as well as the replacement of ageing
infrastructure will help Connecticut Water Service to provide
True to the defensive nature of all utilities, Connecticut Water
Service also has a steady dividend payment record. The company
has increased the annual dividend rate in each of the last 44
years. We believe the company's practice of returning wealth to
shareholders will keep alive investor interest in the stock.
Other Stocks to Consider
Some other stocks worth considering in the water utility sector
Middlesex Water Co.
American Water Works Company, Inc.
California Water Service Group
). While Middlesex Water holds a Zacks Rank #1 (Strong Buy),
American Water Works Company and California Water Service carry a
Zacks Rank #2 (Buy).