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California Water (CWT) Begins Water Main Work at Los Altos

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California Water Service (CWT - Free Report) recently initiated a water main replacement project in central Los Altos to upgrade the region’s basic infrastructure and maintain reliability of its services. The utility will take nearly nine weeks to install a 2,600-feet long new 8-inch ductile iron water main and remove six aging fire hydrants to improve the flow of water for its customers.

Company’s Prior Efforts

To ensure its credibility with high-quality water and wastewater services, the company is focused on revamping its weathered infrastructure. In June, it completed a water pipeline replacement project in central Salinas. Also, in the same month, it concluded a water main replacement work in the eastern part of Bakersfield and began a similar endeavor in Rolling Hills Estates as well.

Prior to this, in April, it started repairing its water infrastructure in western Torrance. In March, it completed a water infrastructure renovation in Hamilton City to enhance its credentials as a service provider for its customers.

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 expense estimate within $270-$300 million.

Need for Investments

The aging U.S. water and wastewater infrastructure requires massive amount of expenditure to ensure 24x7 supply of drinkable water. In absence of proper infrastructural development, large volumes of water go waste on a daily basis in the United States due to mainline breaks. This not only increases the cost of water services but also the possibility of water contamination. Per the Water and Wastewater Equipment Manufacturers Association, a hefty $750-billion investment might be required to maintain and increase the amount of drinking water along with preserving the quality of wastewater services to meet demand over the next two decades.

Peer Moves

California Water Service apart, there are many players from the industry, which are pumping heavy resources into infrastructure to enhance and sustain the same. Another water utility American Water Works (AWK - Free Report) has plans to invest $10.4 billion between 2021 and 2025. Also, Middlesex Water (MSEX - Free Report) — under the Water for Tomorrow program — is regularly putting money on system reliability upgrade, resiliency and the overall service quality. Another utility Essential Utilities (WTRG - Free Report) plans to invest $3 billion between 2021 and 2023 to strengthen its water and natural gas operations and efficiently serve the expanding customer base.

Zacks Rank & Price Performance

Shares of this presently Zacks Rank #3 (Hold) player have gained 3.9% in the past six months, outperforming the industry’s rise of 1.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Six Months Price Performance

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