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4 Reasons to Add Consolidated Water (CWCO) to Your Portfolio
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Consolidated Water Co. Ltd. (CWCO - Free Report) is gaining from the return of tourism to the Cayman Islands, and ongoing improvement in tourist activity will further drive earnings. Using Reverse Osmosis, one of the most advanced water purification technologies, to convert seawater to potable water at all water treatment plants boosts its performance.
The Zacks Consensus Estimate for CWCO’s 2023 and 2024 earnings per share (EPS) has increased 1.1% and 2.1% in the past 60 days.
The consensus mark for 2023 sales is pegged at $132.3 million, implying year-over-year growth of 40.5%.
Consolidated Water’s long-term (three- to five-year) earnings growth rate is 8%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company utilizes funds to generate higher returns. Currently, the company’s ROE is 8.98%, higher than the sector’s average of 6.46%. This indicates that CWCO has been utilizing the funds more constructively than its peers in the utility sector.
Debt Position & Liquidity
At the end of second-quarter 2023, CWCO’s total debt to capital was 0.2%, much better than the industry’s average of 48.2%.
The current ratio at the end of the second quarter was 3.72, much higher than the industry’s average of 0.92. The current ratio of more than 1 indicates that the company will be able to easily meet its short-term debt obligations.
Dividend History
Consolidated Water has consistently paid dividends since 1997 and increased shareholders’ value. The company’s quarterly dividend is 8.5 cents per share, resulting in an annualized dividend of 34 cents per share. Its current dividend yield is 1.5%.
Price Performance
In the past year, the CWCO stock has returned 63.3% against the industry’s 6.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are American Water Works (AWK - Free Report) , California Water Service Group (CWT - Free Report) and Essential Utilities (WTRG - Free Report) , each holding a Zacks Rank #2 (Buy) at present.
AWK’s long-term earnings growth rate is 8.2% and dividend yield is 2.02%. The Zacks Consensus Estimate for 2023 EPS is pegged at $4.79, improving 0.4% in the past 60 days.
CWT’s current dividend yield is 1.97%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.85, reflecting a year-over-year growth of 4.5%.
WTRG’s long-term earnings growth rate is 5.6% and dividend yield is 3.12%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.86, reflecting a year-over-year growth of 5%.
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4 Reasons to Add Consolidated Water (CWCO) to Your Portfolio
Consolidated Water Co. Ltd. (CWCO - Free Report) is gaining from the return of tourism to the Cayman Islands, and ongoing improvement in tourist activity will further drive earnings. Using Reverse Osmosis, one of the most advanced water purification technologies, to convert seawater to potable water at all water treatment plants boosts its performance.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick. You can see the complete list of today’s Zacks #1 Rank stocks here.
Growth Projections & Long-Term Growth
The Zacks Consensus Estimate for CWCO’s 2023 and 2024 earnings per share (EPS) has increased 1.1% and 2.1% in the past 60 days.
The consensus mark for 2023 sales is pegged at $132.3 million, implying year-over-year growth of 40.5%.
Consolidated Water’s long-term (three- to five-year) earnings growth rate is 8%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company utilizes funds to generate higher returns. Currently, the company’s ROE is 8.98%, higher than the sector’s average of 6.46%. This indicates that CWCO has been utilizing the funds more constructively than its peers in the utility sector.
Debt Position & Liquidity
At the end of second-quarter 2023, CWCO’s total debt to capital was 0.2%, much better than the industry’s average of 48.2%.
The current ratio at the end of the second quarter was 3.72, much higher than the industry’s average of 0.92. The current ratio of more than 1 indicates that the company will be able to easily meet its short-term debt obligations.
Dividend History
Consolidated Water has consistently paid dividends since 1997 and increased shareholders’ value. The company’s quarterly dividend is 8.5 cents per share, resulting in an annualized dividend of 34 cents per share. Its current dividend yield is 1.5%.
Price Performance
In the past year, the CWCO stock has returned 63.3% against the industry’s 6.7% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are American Water Works (AWK - Free Report) , California Water Service Group (CWT - Free Report) and Essential Utilities (WTRG - Free Report) , each holding a Zacks Rank #2 (Buy) at present.
AWK’s long-term earnings growth rate is 8.2% and dividend yield is 2.02%. The Zacks Consensus Estimate for 2023 EPS is pegged at $4.79, improving 0.4% in the past 60 days.
CWT’s current dividend yield is 1.97%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.85, reflecting a year-over-year growth of 4.5%.
WTRG’s long-term earnings growth rate is 5.6% and dividend yield is 3.12%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.86, reflecting a year-over-year growth of 5%.