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CWT or YORW: Which Water Supply Stock Promises Greater Returns?
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Key Takeaways
CWT is projected to post 2025 EPS of $2.39 on $1B revenues, while YORW targets $1.35 EPS on $78M.
CWT's debt-to-capital is 48.11% versus YORW's 48.22%, both below the industry's 50.04%.
CWT shares rose 0.4% quarter to date compared with the industry's 0.9% gain.
The Zacks Utility - Water Supply industry comprises companies that provide drinking water and wastewater services to industrial, commercial, and residential customers, as well as numerous military bases across the country.
Healthy and hygienic living requires a constant, uninterrupted flow of clean potable water and reliable sewer services. Water utilities carry out the essential duty of providing millions of Americans with potable water and wastewater services on a daily basis. To consistently provide customers with potable water, utility operators own and operate storage tanks, treatment facilities, and desalination units.
Water utility operators own nearly 2.2 million miles of pipelines that are getting old. Utilities replace old pipelines and add new ones to expand operations. According to the U.S. Environmental Protection Agency, an estimated $1.25 trillion investment is necessary to maintain and expand drinking water and wastewater services to meet demand over the next 20 years.
Utilities need massive investments to maintain, upgrade and expand operations. Capital-intensive utility operators will benefit from the recent interest rate cuts and continue their capital expenditures at reduced capital servicing expenses. The Federal Reserve recently reduced interest rates by 25 basis points, lowering the benchmark rates to a range of 4-4.25%.
In this article, we have run a comparative analysis on two Zacks Utility – Water Supply companies — California Water Service Group (CWT - Free Report) and The York Water Company (YORW - Free Report) — to decide which one is a better pick for your portfolio.
The Zacks Consensus Estimate for CWT’s 2025 earnings is pinned at $2.39 per share on revenues of $1 billion. This implies a year-over-year bottom-line decrease of 26.5% and a top-line decline of 3.3%.
The Zacks Consensus Estimate for YORW’s 2025 earnings is pegged at $1.35 per share on revenues of $78 million. This indicates a year-over-year bottom-line decline of 4.9% and top-line growth of 4.1%.
Debt Position of CWT & YORW
The debt-to-capital ratio is a vital indicator of the financial position of a company. It shows the amount of debt used to run a business. Currently, California Water Service and York Water have a debt-to-capital of 48.11% and 48.22%, respectively, compared with the industry’s 50.04%.
The times interest earned ratio, if more than one, indicates that the company has enough financial flexibility to meet its near-term interest obligations. CWT and YORW have times interest earned ratio of 2.9 and 3.1, respectively.
CWT & YORW’s Dividend Yield
Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for California Water Service is 2.63% and that for York Water is 2.82% compared with the Zacks S&P 500 composite’s average of 1.1%.
CWT & YORW’s Surprise History
California Water Service delivered an average earnings surprise of 51.6% for the trailing four quarters. York Water delivered a negative earnings surprise of 5.22% in the last four quarters.
CWT & YORW Stocks’ Price Performance
In the quarter-to-date period, shares of CWT have risen 0.4%, while those of YORW have lost 1.6%. The industry has risen 0.9% in the same time frame.
Image Source: Zacks Investment Research
CWT or YORW: Which Stock has the Edge?
York Water and California Water Service are both appropriate and wise choices for your portfolio at present. Both companies are focused on providing water and wastewater services to customers and have the capacity to expand further and improve service reliability. However, our choice at this moment is CWT, given its better debt management and price performance than YORW.
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CWT or YORW: Which Water Supply Stock Promises Greater Returns?
Key Takeaways
The Zacks Utility - Water Supply industry comprises companies that provide drinking water and wastewater services to industrial, commercial, and residential customers, as well as numerous military bases across the country.
Healthy and hygienic living requires a constant, uninterrupted flow of clean potable water and reliable sewer services. Water utilities carry out the essential duty of providing millions of Americans with potable water and wastewater services on a daily basis. To consistently provide customers with potable water, utility operators own and operate storage tanks, treatment facilities, and desalination units.
Water utility operators own nearly 2.2 million miles of pipelines that are getting old. Utilities replace old pipelines and add new ones to expand operations. According to the U.S. Environmental Protection Agency, an estimated $1.25 trillion investment is necessary to maintain and expand drinking water and wastewater services to meet demand over the next 20 years.
Utilities need massive investments to maintain, upgrade and expand operations. Capital-intensive utility operators will benefit from the recent interest rate cuts and continue their capital expenditures at reduced capital servicing expenses. The Federal Reserve recently reduced interest rates by 25 basis points, lowering the benchmark rates to a range of 4-4.25%.
In this article, we have run a comparative analysis on two Zacks Utility – Water Supply companies — California Water Service Group (CWT - Free Report) and The York Water Company (YORW - Free Report) — to decide which one is a better pick for your portfolio.
Both companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CWT & YORW’s Growth Projections
The Zacks Consensus Estimate for CWT’s 2025 earnings is pinned at $2.39 per share on revenues of $1 billion. This implies a year-over-year bottom-line decrease of 26.5% and a top-line decline of 3.3%.
The Zacks Consensus Estimate for YORW’s 2025 earnings is pegged at $1.35 per share on revenues of $78 million. This indicates a year-over-year bottom-line decline of 4.9% and top-line growth of 4.1%.
Debt Position of CWT & YORW
The debt-to-capital ratio is a vital indicator of the financial position of a company. It shows the amount of debt used to run a business. Currently, California Water Service and York Water have a debt-to-capital of 48.11% and 48.22%, respectively, compared with the industry’s 50.04%.
The times interest earned ratio, if more than one, indicates that the company has enough financial flexibility to meet its near-term interest obligations. CWT and YORW have times interest earned ratio of 2.9 and 3.1, respectively.
CWT & YORW’s Dividend Yield
Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for California Water Service is 2.63% and that for York Water is 2.82% compared with the Zacks S&P 500 composite’s average of 1.1%.
CWT & YORW’s Surprise History
California Water Service delivered an average earnings surprise of 51.6% for the trailing four quarters. York Water delivered a negative earnings surprise of 5.22% in the last four quarters.
CWT & YORW Stocks’ Price Performance
In the quarter-to-date period, shares of CWT have risen 0.4%, while those of YORW have lost 1.6%. The industry has risen 0.9% in the same time frame.
Image Source: Zacks Investment Research
CWT or YORW: Which Stock has the Edge?
York Water and California Water Service are both appropriate and wise choices for your portfolio at present. Both companies are focused on providing water and wastewater services to customers and have the capacity to expand further and improve service reliability. However, our choice at this moment is CWT, given its better debt management and price performance than YORW.