On January 8, Zacks Investment Research upgraded
Connecticut Water Service Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
This water utility has been producing consistent results and
delivered positive earnings surprises in 7 of the last 10
quarters with an average beat of 12.9%. The regular dividend
payment and increase in the annual dividend rate in each of the
last 43 years make the stock attractive. The current dividend
yield of 3.2% is higher than the industry average of 1.8%.
Connecticut Water reported third-quarter (ended September 30)
results on November 9. Non-GAAP earnings per share came in at 67
cents, surpassing the Zacks Consensus Estimate of 56 cents by
19.4%. A dry summer had increased demand for water and saved
costs at its Water activities segment were favorable for the
The company was able to refinance its long-term debt of $54.6
million in October on favorable terms. This deal will benefit the
company as it will lower the annual interest expenses by $1
The capital investment plan of $31.3 million for 2013 will enable
the company to make infrastructure replacement and increase the
reliability of its existing water system. Besides, the decision
to acquire Biddeford and Saco Water Company in 2013 will help in
expanding Connecticut Water's customer base.
The Zacks Consensus Estimate for 2012 increased 18.48% to $1.53
per share as the majority of estimates were revised upward over
the last 60 days.
Other Stocks to Consider
Besides this company, a few other water utilities are also
performing well and have a favorable Zacks Rank. The stocks worth
American Water Works Company, Inc.
American States Water Company
Aqua America Inc.
). All these currently have a short-term Zacks Rank #2 (Buy).
AMER WATER WORK (AWK): Free Stock Analysis
AMER STATES WTR (AWR): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
AQUA AMER INC (WTR): Free Stock Analysis
To read this article on Zacks.com click here.