On Aug 15, Zacks Investment Research upgraded
Connecticut Water Service Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Connecticut Water Service Inc. has witnessed rising earnings
estimates after posting solid results in the second quarter 2013.
This water utility has been delivering positive earnings
surprises in 3 of the last 4 quarters with an average beat of
6.61%. The long-term earnings growth of the company is presently
pegged at 5.00% on the back of sales growth of 11.43%.
During the second quarter, the company took the initiative to
replace the dated main line in its service territories.
Connecticut Water Service decided to replace the 3600 feet, 90
year old water main in Enfield and the 6000 feet, 100 year old
main in Canton under its Water Infrastructure and Conservation
Adjustment (WICA) program. This will not only enhance the
reliability of its existing operations but also stop wastage.
Since the inception of the WICA program in 2007, Connecticut
Water Service has invested $52.5 million in the project.
The regulatory agreement with the Office of Consumer Counsel and
the Attorney General of the State of Connecticut is expected to
benefit both Connecticut Water Service and its customers.
The customers will have the benefit of a two-year rate reduction,
effective Apr 1, 2014, and the company would benefit from the
timely implementation of the revenue adjustment mechanism.
The financial flexibility and strong performance have enabled the
company to pay regular dividends and increase the annual dividend
rate in each of the last 44 years, indeed making the stock
attractive. On Aug 15, the company raised its quarterly dividend
rate by 2.1% to 24.75 cents from 24.25 cents. Another water
American States Water Company
) increased its quarterly dividend rate by 14.1% to 40.5 cents
from 35.5 cents per share.
The Zacks Consensus Estimate for 2013 has risen 8.1% in the last
7 days to $1.47 per share, reflecting year-over-year growth of
12.68%. For 2014, the Zacks Consensus Estimate increased 7.7% in
the past one week to $1.69, reflecting year-over-year growth of
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
Consolidated Water Co. Ltd.
). Both these stocks currently have a short-term Zacks Rank #2
AMER STATES WTR (AWR): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CONSOLTD WATER (CWCO): Free Stock Analysis
SJW CORP (SJW): Free Stock Analysis Report
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