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Reasons to Add California Water (CWT) to Your Portfolio Now
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California Water Service Group’s (CWT - Free Report) investment plans in infrastructure and efficient services are expected to help expand its customer base. The company is expanding its operations through acquisitions and regulated and non-regulated activities that will further boost its performance. Given its growth opportunities, CWT makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 0.4% in the past 60 days to $2.25.
The Zacks Consensus Estimate for 2024 revenues is pinned at $885.1 million, indicating year-over-year growth of 11.4%.
Debt Position
Currently, California Water’s total debt to capital is 42.4%, better than the industry’s average of 47.62%.
The time to interest earned ratio at the end of fourth-quarter 2023 was 1.8. The ratio, being greater than one, reflects CWT’s ability to meet future interest obligations without difficulties.
Dividend History
The utility company has been consistently paying dividends to its shareholders. It has been increasing dividends every year since the inception of the payment. In January 2024, the company’s board of directors declared a quarterly dividend of 26 cents per share, resulting in an annualized dividend of $1.04 per share.
This marks the company’s 316th consecutive quarterly dividend. On a long-term basis, California Water aims to achieve a dividend payout ratio of 60%. Currently, its dividend yield is 2.46%, better than the Zacks S&P 500 Composite’s yield of 1.3%.
Systematic Investments
CWT’s systematic investment plans in infrastructure will help it further provide customers with efficient water and wastewater services. The company invested $383.7 million in infrastructure improvements in 2023, up 17.1% from the 2022 level. The capital expenditure for 2024 is anticipated to be $365 million.
Price Performance
In the past month, shares of California Water have risen 1% against the industry’s 0.4% decline.
CWCO’s long-term (three to five years) earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.
AWK’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for 2024 EPS is pegged at $5.20, implying a year-over-year increase of 6.1%.
AWR’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2024 EPS is pinned at $3.01, implying a year-over-year improvement of 5.6%.
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Reasons to Add California Water (CWT) to Your Portfolio Now
California Water Service Group’s (CWT - Free Report) investment plans in infrastructure and efficient services are expected to help expand its customer base. The company is expanding its operations through acquisitions and regulated and non-regulated activities that will further boost its performance. Given its growth opportunities, CWT makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 0.4% in the past 60 days to $2.25.
The Zacks Consensus Estimate for 2024 revenues is pinned at $885.1 million, indicating year-over-year growth of 11.4%.
Debt Position
Currently, California Water’s total debt to capital is 42.4%, better than the industry’s average of 47.62%.
The time to interest earned ratio at the end of fourth-quarter 2023 was 1.8. The ratio, being greater than one, reflects CWT’s ability to meet future interest obligations without difficulties.
Dividend History
The utility company has been consistently paying dividends to its shareholders. It has been increasing dividends every year since the inception of the payment. In January 2024, the company’s board of directors declared a quarterly dividend of 26 cents per share, resulting in an annualized dividend of $1.04 per share.
This marks the company’s 316th consecutive quarterly dividend. On a long-term basis, California Water aims to achieve a dividend payout ratio of 60%. Currently, its dividend yield is 2.46%, better than the Zacks S&P 500 Composite’s yield of 1.3%.
Systematic Investments
CWT’s systematic investment plans in infrastructure will help it further provide customers with efficient water and wastewater services. The company invested $383.7 million in infrastructure improvements in 2023, up 17.1% from the 2022 level. The capital expenditure for 2024 is anticipated to be $365 million.
Price Performance
In the past month, shares of California Water have risen 1% against the industry’s 0.4% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Consolidated Water Co. Ltd. (CWCO - Free Report) , American Water Works (AWK - Free Report) and American States Water (AWR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CWCO’s long-term (three to five years) earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.
AWK’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for 2024 EPS is pegged at $5.20, implying a year-over-year increase of 6.1%.
AWR’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2024 EPS is pinned at $3.01, implying a year-over-year improvement of 5.6%.