The subsidiary of
California Water Service Group ( CWT Quick Quote CWT - Free Report) , Hawaii Water Service, inked a deal to acquire the assets of HOH Utilities Company, thereby expanding the utility’s footprint on the island of Kauai. The agreement is subject to approval from the Hawaii Public Utilities Commission along with some other customary closing conditions. The acquisition when completed will add nearly 1,800 customers to California Water Service unit’s existing customer base of 6,000 customers. Initiatives to Strengthen Operation
The utility is consistently making investments to improve reliability of its water and wastewater services, and to focus on renovating its aging infrastructure. In April, the company began installing new water main on the streets of Dolores and Eureka, which is likely to be completed in August. Prior to this, it started enhancing its water infrastructure in western Torrance. In March, it completed overhauling a water infrastructure in Hamilton City to increase its reliability by providing high-quality services to its customers.
The company is not only making steady efforts to grow organically but is also trying to boost operations inorganically. Washington Water Service, another unit of the utility, inked a deal to operate and maintain Stroh’s Water Company’s water system while another unit California Water Service signed an agreement to acquire the water system assets of Skylonda Mutual Water Company. Notably, after investing $298.7 million in 2020, the utility spent $66.8 million in the first three months of 2021. The company reaffirmed its 2021 capital estimates within $270-$300 million. Need for Investments in Water Space
Delay in revamping the pipelines could result in wastage of potable water on a daily basis while pipeline cracks might increase the possibility of potable water contamination. Per the Water and Wastewater Equipment Manufacturers Association, an estimated investment of $750 billion is needed to meet demand over the next 20 years.
The aging U.S. water and wastewater infrastructure requires bulk expenditure to ensure 24x7 supply of drinkable water and continuous wastewater services. Hence, large water utilities are actively investing heavy capex in enriching their quality of services. American Water Works Company ( AWK Quick Quote AWK - Free Report) has plans to invest $10.4 billion in the 2021-2025 time period and $22-$25 billion in the next decade. Middlesex Water ( MSEX Quick Quote MSEX - Free Report) — under the Water for Tomorrow program — is making regular capital investments to enhance system reliability, resilience and overall service quality. Another water utility Essential Utilities ( WTRG Quick Quote WTRG - Free Report) aims to invest $3 billion through 2023 to fortify operations and efficiently serve its expanding customer base. Zacks Rank & Price Performance
Shares of this currently Zacks Rank #3 (Hold) utility have gained 9.5% in the past six months, outperforming the
industry’s rise of 2.7%. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Six Months Price Performance Image Source: Zacks Investment Research Bitcoin, Like the Internet Itself, Could Change Everything
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