Reasons to Add Consolidated Water (CWCO) to Your Portfolio

Consolidated Water CWCO uses one of the most advanced water purification technologies to convert seawater into potable water at all water treatment plants to provide high-quality water to its customers and boost its performance. Consolidated Water makes for a solid investment option in the utility sector, given its rising earnings estimates.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a robust investment option at the moment.

Growth Projections & Surprise History

The Zacks Consensus Estimate for CWCO’s 2024 earnings per share (EPS) has increased 0.8% to $1.24 in the past 60 days.

The company’s (three to five years) earnings growth is pegged at 8%. It delivered an average earnings surprise of 61.56% in the last four quarters.

Return on Equity

Return on equity (ROE) indicates how efficiently a company has been utilizing funds to generate higher returns. Currently, CWCO’s ROE is 13.39%, higher than the industry’s average of 9.86%. This indicates that the company has been utilizing funds more constructively than its peers in the utility electric power industry.

Solvency & Liquidity

At the end of the third quarter of 2023, CWCO’s total debt to capital was 0.14%, much better than the industry’s average of 47.49%.

The current ratio at the end of the third quarter was 4.14, much higher than the industry’s average of 0.92. The ratio, being greater than one, indicates the company’s ability to meet its future short-term liabilities without difficulties.

Dividend History

Consolidated Water has been consistently paying out dividends since 1997 and increasing shareholders’ value. Currently, its quarterly dividend is 9.5 cents per share, which resulted in an annualized dividend of 38 cents per share.

Price Performance

In the past month, the stock has returned 1.6% against the industry’s 1.7% decline.

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Other Stocks to Consider

A few other top-ranked stocks from the same industry are American States Water AWR, American Water Works AWK and Veolia Environnement VEOEY, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AWR’s long-term earnings growth rate is 6.5%. The company delivered an average earnings surprise of 3.12% in the last four quarters.

AWK’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for American Water Works’ 2024 EPS is pegged at $5.20, which implies a year-over-year improvement of 6.12%.

VEOEY’s long-term earnings growth rate is 9.27%. The Zacks Consensus Estimate for Veolia Environnement’s 2024 EPS is pegged at $2.24, which suggests year-over-year growth of 279.66%.


 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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