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Consolidated Water (CWCO) Rides on New Technology, Acquisitions
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Consolidated Water Co. Ltd. (CWCO - Free Report) uses the most advanced technology to convert seawater to potable water to meet customer needs, which boosts its financial performance. The company is also gaining from expanding operations via acquisitions and organic projects.
However, this Zacks Rank #2 (Buy) company faces risks related to the ongoing delay in renewal of its license.
Tailwinds
Nearly 97% of the earth’s water is in oceans. 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. This will help the company to boost its performance.
Consolidated Water aims to expand its operations in complementary service industries, which will complement its existing business operations. The company will pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.
The acquisition of full ownership of PERC Water Corporation (“PERC”) will aid the company in expanding its operations. In addition to synergies with other CWCO business areas and potential developments, PERC's robust operating performance, revenue growth, profitability and growth prospects should improve CWCO's performance.
Headwinds
The company’s exclusive license to provide water to retail customers in the Cayman Islands has not been expressly extended and CWCO is presently unable to predict the outcome of its ongoing negotiations relating to this license. This problem can adversely impact its operations and lower revenues.
Delays in the collection of its accounts receivable from its Bahamas subsidiary might negatively impact its consolidated financial results.
Price Performance
In the past year, the stock has returned 48.7% against the industry’s decline of 11.2%.
AWK’s long-term (three to five years) earnings growth rate is 8%. The Zacks Consensus Estimate for AWK’s 2024 earnings per share (EPS) indicates a year-over-year increase of 6.5%.
The Zacks Consensus Estimate for CWT’s 2024 EPS implies growth of 147.3% year over year. The same for sales indicates a year-over-year improvement of 11.3%.
GWRS’ long-term earnings growth rate is 15%. The company delivered an average earnings surprise of 28.8% in the last four quarters.
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Consolidated Water (CWCO) Rides on New Technology, Acquisitions
Consolidated Water Co. Ltd. (CWCO - Free Report) uses the most advanced technology to convert seawater to potable water to meet customer needs, which boosts its financial performance. The company is also gaining from expanding operations via acquisitions and organic projects.
However, this Zacks Rank #2 (Buy) company faces risks related to the ongoing delay in renewal of its license.
Tailwinds
Nearly 97% of the earth’s water is in oceans. 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. This will help the company to boost its performance.
Consolidated Water aims to expand its operations in complementary service industries, which will complement its existing business operations. The company will pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.
The acquisition of full ownership of PERC Water Corporation (“PERC”) will aid the company in expanding its operations. In addition to synergies with other CWCO business areas and potential developments, PERC's robust operating performance, revenue growth, profitability and growth prospects should improve CWCO's performance.
Headwinds
The company’s exclusive license to provide water to retail customers in the Cayman Islands has not been expressly extended and CWCO is presently unable to predict the outcome of its ongoing negotiations relating to this license. This problem can adversely impact its operations and lower revenues.
Delays in the collection of its accounts receivable from its Bahamas subsidiary might negatively impact its consolidated financial results.
Price Performance
In the past year, the stock has returned 48.7% against the industry’s decline of 11.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the same industry are American Water Works (AWK - Free Report) , California Water Service Group (CWT - Free Report) and Global Water Resources (GWRS - 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.
AWK’s long-term (three to five years) earnings growth rate is 8%. The Zacks Consensus Estimate for AWK’s 2024 earnings per share (EPS) indicates a year-over-year increase of 6.5%.
The Zacks Consensus Estimate for CWT’s 2024 EPS implies growth of 147.3% year over year. The same for sales indicates a year-over-year improvement of 11.3%.
GWRS’ long-term earnings growth rate is 15%. The company delivered an average earnings surprise of 28.8% in the last four quarters.