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Consolidated Water (CWCO) to Build Desalination Unit in Cayman

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Consolidated Water Co. Ltd. (CWCO - Free Report) announced that it signed a definitive agreement with the water authority of the Cayman Islands for a seawater reverse osmosis plant in George Town, Grand Cayman. The plant will produce up to 2.64 million gallons of potable water per day using two independent reverse osmosis trains.

Consolidated Water expects the deal to generate $20 million in revenues over the term of the contract of nearly 11.5 years, with the majority of revenues expected in the first 18 months as the company builds and sells the plant to the water authority. The plant is expected to be complete in the fourth quarter of 2023.

Growth and Development in the Cayman Islands

Consolidated Water is a leading developer and operator of advanced water supply and treatment plants and is working relentlessly to boost the existing operations in the Cayman Islands. The return of tourism to the Cayman Islands has been beneficial for CWCO through the Phase 5 reopening plan. Several major airlines resumed their flights and cruise ships were welcomed back to the islands. Consolidated Water experienced a 7% year-over-year increase in water sales in the Grand Cayman retail service areas during the first two months of 2022 and produced nearly 15% more water in March 2022 compared with the March 2021 levels.

Through this desalination plant deal, Consolidated Water is expected to design, construct and commission the plant over the next 18 months and then sell the facility to the water authority. After selling the plant, Consolidated Water will operate and maintain the plant and produce water for nearly 10 years.

Currently, Consolidated Water has seven plants operating in Grand Cayman, which produces the majority of piped drinking water and is home to about 95% of the nation’s population. This major win of the seawater reverse osmosis plant is a result of cost-effective water supply initiatives that have supported the growth and development of Grand Cayman by supplying safe and affordable potable water to residents and visitors.

Zacks Rank & Price Performance

Consolidated Water currently carries a Zacks Rank #4 (Sell). In the past three months, shares of CWCO have railed 10.2% against the industry’s 2.6% decline.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research
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Stocks to Consider

Some better-ranked stocks from the same industry include Global Water Resources (GWRS - Free Report) , Essential Utilities (WTRG - Free Report) and American Water Works (AWK - Free Report) .

Global Water Resources currently sports a Zacks Rank #1. Global Water Resources’ long-term (three to five years) earnings growth is currently pegged at 15%. The Zacks Consensus Estimate for 2023 earnings implies year-over-year growth of 31.3%. GWRS’ earnings surprise in the last four quarters is 154.2%, on average.

Essential Utilities currently carries a Zacks Rank #2 (Buy). Essential Utilities’ long-term earnings growth is currently pegged at 6.1%. The Zacks Consensus Estimate for 2022 earnings implies year-over-year growth of 7.2%. WTRG’s current dividend yield is 2.5%, better than the industry average of 1.99%.

American Water Works currently carries a Zacks Rank #3 (Hold). American Water Works’ long-term earnings growth is currently pegged at 8.1%. The Zacks Consensus Estimate for 2022 earnings implies year-over-year growth of 5.2%. AWK’s earnings surprise in the last four quarters is 5.3%, on average.

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