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CWCO or GWRS: Which Utility Water Supply Stock to Buy Now?
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A continuous supply of clean potable water and reliable sewer service are essential for a healthy and hygienic lifestyle. Water utility operators in the United States own and utilize more than 2 million miles of pipeline that are getting old to provide 24x7 services. Therefore, utilities continuously replace old pipelines and add new ones to expand operations.
Utility operators own storage tanks, treatment plants and desalination plants to supply uninterrupted potable water across customer classes. Despite the ample presence of water across the globe, less than 1% of the total volume is fit for human use. Even then, a large volume of potable water is lost in the United States every day due to pipeline breaks and leakage. Per the findings of the American Society of Civil Engineers, water main breaks result in the wastage of 6 billion gallons of potable water each day and add to the loss of water utility operators.
Upgrading and maintaining old pipelines, along with proper usage of potable water and water-efficient appliances, can help stop the waste of this priceless resource. However, a huge investment is required to upgrade and maintain the aging U.S. water infrastructure. Per the Environmental Protection Agency, an estimated $750 billion investment is necessary to maintain and expand drinking water and wastewater services to meet demand over the next 20 years. In addition, the U.S. government is planning to invest in upgrading the water infrastructure.
Amid such a backdrop, we ran a comparative analysis on two stocks from the Zacks Utility - Water Supply industry — Consolidated Water Co. Ltd. (CWCO - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) — to decide which stock is a better pick for your portfolio now.
Consolidated Water has a market capitalization of $248.2 million, while Global Water Resources has $279.3 million.
Estimate Revision
The Zacks Consensus Estimate for Consolidated Water’s 2022 and 2023 earnings is pegged at 73 cents and 92 cents per share, respectively, increasing 8.9% and 17.9% in the past 60 days.
The Zacks Consensus Estimate for Global Water Resources’ 2022 and 2023 earnings is pegged at 20 cents and 22 cents per share, respectively, increasing 5.3% and 10% in the past 60 days.
Debt to Capital
Debt to capital is a good indicator of the financial position of a company. The indicator shows how much debt is used to run the business. Consolidated Water and Global Water Resources have a debt to capital of 0.2% and 78.8%, respectively, compared with the industry average of 46.61%.
Dividend Yield
Utility companies generally distribute dividends. Currently, the dividend yield for Consolidated Water and Global Water Resources is 2.14% and 2.69%, respectively, compared with the industry average of 2.08%.
Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for Consolidated Water and Primo Water is 5.3% and 16.1%, respectively, compared with the industry’s ROE of 9.47%.
Price Performance
In the past six months, Consolidated Water’s shares have gained 43.6% against the industry's decline of 17.1%. Shares of Global Water Resources have lost 24.8% in the same time frame.
Image Source: Zacks Investment Research
Outcome
Although both companies are efficiently providing services to customers, Consolidated Water is a better pick for your portfolio as of now due to its rising earnings estimates and a strong improvement in share price.
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CWCO or GWRS: Which Utility Water Supply Stock to Buy Now?
A continuous supply of clean potable water and reliable sewer service are essential for a healthy and hygienic lifestyle. Water utility operators in the United States own and utilize more than 2 million miles of pipeline that are getting old to provide 24x7 services. Therefore, utilities continuously replace old pipelines and add new ones to expand operations.
Utility operators own storage tanks, treatment plants and desalination plants to supply uninterrupted potable water across customer classes. Despite the ample presence of water across the globe, less than 1% of the total volume is fit for human use. Even then, a large volume of potable water is lost in the United States every day due to pipeline breaks and leakage. Per the findings of the American Society of Civil Engineers, water main breaks result in the wastage of 6 billion gallons of potable water each day and add to the loss of water utility operators.
Upgrading and maintaining old pipelines, along with proper usage of potable water and water-efficient appliances, can help stop the waste of this priceless resource. However, a huge investment is required to upgrade and maintain the aging U.S. water infrastructure. Per the Environmental Protection Agency, an estimated $750 billion investment is necessary to maintain and expand drinking water and wastewater services to meet demand over the next 20 years. In addition, the U.S. government is planning to invest in upgrading the water infrastructure.
Amid such a backdrop, we ran a comparative analysis on two stocks from the Zacks Utility - Water Supply industry — Consolidated Water Co. Ltd. (CWCO - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) — to decide which stock is a better pick for your portfolio now.
Both the stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. At present, Consolidated Water has a VGM Score of B, while Global Water Resources has a VGM Score of C.
Consolidated Water has a market capitalization of $248.2 million, while Global Water Resources has $279.3 million.
Estimate Revision
The Zacks Consensus Estimate for Consolidated Water’s 2022 and 2023 earnings is pegged at 73 cents and 92 cents per share, respectively, increasing 8.9% and 17.9% in the past 60 days.
The Zacks Consensus Estimate for Global Water Resources’ 2022 and 2023 earnings is pegged at 20 cents and 22 cents per share, respectively, increasing 5.3% and 10% in the past 60 days.
Debt to Capital
Debt to capital is a good indicator of the financial position of a company. The indicator shows how much debt is used to run the business. Consolidated Water and Global Water Resources have a debt to capital of 0.2% and 78.8%, respectively, compared with the industry average of 46.61%.
Dividend Yield
Utility companies generally distribute dividends. Currently, the dividend yield for Consolidated Water and Global Water Resources is 2.14% and 2.69%, respectively, compared with the industry average of 2.08%.
Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholders’ funds. ROE for the trailing 12 months for Consolidated Water and Primo Water is 5.3% and 16.1%, respectively, compared with the industry’s ROE of 9.47%.
Price Performance
In the past six months, Consolidated Water’s shares have gained 43.6% against the industry's decline of 17.1%. Shares of Global Water Resources have lost 24.8% in the same time frame.
Image Source: Zacks Investment Research
Outcome
Although both companies are efficiently providing services to customers, Consolidated Water is a better pick for your portfolio as of now due to its rising earnings estimates and a strong improvement in share price.