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Consolidated Water Co. Ltd. (CWCO - Free Report) announced that its board of directors has approved a 11.8% increase in its quarterly cash dividend rate. The new dividend for fourth-quarter 2023 will be 9.5 cents per share compared with the previous quarter’s 8.5 cents. The new cash dividend is payable on Oct 31, 2023, to stockholders of record as of Oct 2, 2023.
This increase resulted in an annualized dividend of 38 cents per share compared with the previous level of 34 cents. The current dividend yield is 1.23%, lower than the Zacks S&P 500 Composite's average of 1.44%.
Can Consolidated Water Sustain Dividend Hikes?
Nearly 97% of the earth’s water is in the ocean. To harness this resource, Consolidated Water utilizes the Reverse Osmosis Technology, one of the most advanced technologies to convert seawater to potable water at all water treatment plants it constructs and operates. The return of tourism to the Cayman Islands has been beneficial for Consolidated Water and is expected to further boost its performance.
The company aims to expand its operations in complementary service industries, which will complement its existing business operations. It will pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions.
CWCO exercised its right to acquire the remaining 39% of equity ownership of PERC Water Corporation (PERC) for nearly $7.8 million. PERC’s strong operating performance, revenue growth and profitability, as well as its synergies with other areas of Consolidated Water’s business and future growth prospects will drive CWCO’s performance.
These positive developments and strong growth across all four of its business segments indicate that management will be able to sustain the shareholder-friendly initiatives in the future as well.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, National Fuel Gas Company (NFG - Free Report) , Chesapeake Utilities Corp. (CPK - Free Report) and American Water Works Company Inc. (AWK - Free Report) have raised their quarterly dividend rate by 4.2%, 10.3% and 8%, respectively.
The Zacks Consensus Estimate for National Fuel Gas’ fiscal 2023 earnings is pegged at $5.22 per share, implying a year-over-year decrease of 11.2%. Its current dividend yield is 3.73%.
The Zacks Consensus Estimate for Chesapeake Utilities’ 2023 earnings is pinned at $5.16 per share, implying a year-over-year increase of 2.4%. Its current dividend yield is 2.13%.
The Zacks Consensus Estimate for American Water Works’ 2023 earnings is pegged at $4.79 per share, implying a year-over-year improvement of 6.2%. Its current dividend yield is 2.02%.
Price Performance
In the last month, Consolidated Water’s shares have returned 41.4% against the industry’s average decline of 4.8%.
Image: Bigstock
Consolidated Water's (CWCO) Board Approves 11.8% Dividend Hike
Consolidated Water Co. Ltd. (CWCO - Free Report) announced that its board of directors has approved a 11.8% increase in its quarterly cash dividend rate. The new dividend for fourth-quarter 2023 will be 9.5 cents per share compared with the previous quarter’s 8.5 cents. The new cash dividend is payable on Oct 31, 2023, to stockholders of record as of Oct 2, 2023.
This increase resulted in an annualized dividend of 38 cents per share compared with the previous level of 34 cents. The current dividend yield is 1.23%, lower than the Zacks S&P 500 Composite's average of 1.44%.
Can Consolidated Water Sustain Dividend Hikes?
Nearly 97% of the earth’s water is in the ocean. To harness this resource, Consolidated Water utilizes the Reverse Osmosis Technology, one of the most advanced technologies to convert seawater to potable water at all water treatment plants it constructs and operates. The return of tourism to the Cayman Islands has been beneficial for Consolidated Water and is expected to further boost its performance.
The company aims to expand its operations in complementary service industries, which will complement its existing business operations. It will pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions.
CWCO exercised its right to acquire the remaining 39% of equity ownership of PERC Water Corporation (PERC) for nearly $7.8 million. PERC’s strong operating performance, revenue growth and profitability, as well as its synergies with other areas of Consolidated Water’s business and future growth prospects will drive CWCO’s performance.
These positive developments and strong growth across all four of its business segments indicate that management will be able to sustain the shareholder-friendly initiatives in the future as well.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, National Fuel Gas Company (NFG - Free Report) , Chesapeake Utilities Corp. (CPK - Free Report) and American Water Works Company Inc. (AWK - Free Report) have raised their quarterly dividend rate by 4.2%, 10.3% and 8%, respectively.
The Zacks Consensus Estimate for National Fuel Gas’ fiscal 2023 earnings is pegged at $5.22 per share, implying a year-over-year decrease of 11.2%. Its current dividend yield is 3.73%.
The Zacks Consensus Estimate for Chesapeake Utilities’ 2023 earnings is pinned at $5.16 per share, implying a year-over-year increase of 2.4%. Its current dividend yield is 2.13%.
The Zacks Consensus Estimate for American Water Works’ 2023 earnings is pegged at $4.79 per share, implying a year-over-year improvement of 6.2%. Its current dividend yield is 2.02%.
Price Performance
In the last month, Consolidated Water’s shares have returned 41.4% against the industry’s average decline of 4.8%.
Image Source: Zacks Investment Research
Zacks Rank
Consolidated Water currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.