Connecticut Water Service, Inc.
) has announced its full-year 2014 capital spending guidance. The
board of directors of the company has approved of a total
investment of $45.6 million under its capital spending program
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Per the plan, Connecticut Water will allocate $37.8 million for
its regulated utility subsidiary, The Connecticut Water Company
and the rest will be utilized for operations in the state of
In Connecticut, the company will be investing $15 million under
the Water Infrastructure and Conservation Adjustment Program to
replace existing pipeline.
Connecticut Water expects to legally complete the merger of
Biddeford & Saco Water Company with its unit The Maine Water
Company ("Maine Water") in 2013. The company plans to allot $2.7
million for changing pipeline and infrastructure in Maine through
the Water Infrastructure Surcharge.
We note that the company continues to invest substantially to
improve its existing infrastructure. In the last six months, the
company replaced its ageing water main in Enfield and Canton to
improve system reliability and water flows.
Consequently, Connecticut Water continues to increase its capital
spending level. In 2012, the company's capital expenditure was
$24.7 million. During the first nine months of 2013, the company
invested $22.7 million and intends to deploy a total of $31.3
million in 2013. We believe a continuous rise in capital spending
is primarily due to higher investment in infrastructure
This infrastructure upgrade program will enable Connecticut Water
to provide uninterrupted services to its customers while
strengthening system competence. These factors will subsequently
improve reliability, consumer confidence, public safety and also
maintain the state as well as federal water quality regulations.
Clinton, Conn.-based Connecticut Water currently has a Zacks Rank
#2 (Buy). Other stocks from the industry that are presently
performing well include
Middlesex Water Co.
) with a Zacks Rank #1 (Strong Buy), and
Water Works Company, Inc.
California Water Service Group
), each with a Zacks Rank #2 (Buy).