We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
California Water Service (CWT) Units Buy Two Water Utilities
Read MoreHide Full Article
California Water Service Group’s (CWT - Free Report) subsidiaries, Hawaii Water Service (Hawaii Water) and New Mexico Water Service (New Mexico Water), have acquired the assets of HOH Utilities, LLC (HOH Utilities) and Monterey Water Company (Monterey), respectively.
The acquisition of HOH Utilities’ wastewater system assets added 1,800 residential, commercial and resort customers, including three hotels, condominiums, multi-family housing, single-family homes and a golf course to its customer base of Hawaii Water.
The buyout of the Monterey water system added 380 residential customers to New Mexico Water’s customer base. The company will also get another 100 undeveloped lots that could also be served in the future upon development.
Timely repairs and maintenance of aging water and wastewater infrastructure are crucial to providing high-quality 24x7 services to customers. Both subsidiaries of California Water Service Group will make essential investments in the acquired assets to provide reliable services to customers and protect the environment.
Fragmented Industry Needs Consolidation
Per the American Society of Civil Engineers, nearly 50,000 community water systems and 16,000 wastewater treatment systems in the United States are presently providing water solutions to customers.
Some of the service providers are too small and have limited financial strength to carry out essential and costly repairs on time, leading to pipeline breakage and disruption of services and increasing the possibility of contamination.
Fragmentation in the water and wastewater industry is a headwind. Large water utility companies continue to acquire small players to ensure the extension of high-quality services to customers and the investments required to upgrade old and acquired assets.
California Water Service Group is expanding operations through inorganic routes. In August 2023, it completed the acquisition of Skylonda Mutual Water Company’s water system assets, which added 156 customers. The ongoing buyouts will further expand its operations.
Other water utilities, like American Water Works (AWK - Free Report) and Essential Utilities (WTRG - Free Report) , are making acquisitions to expand operations.
American Water Works, through its subsidiaries, is making systematic acquisitions and taking essential steps to upgrade the old infrastructure of its acquired assets. It added 7,900 customers till Sep 30, 2023, by acquiring 14 companies.
Essential Utilities has expanded its utility operations by completing several water and wastewater acquisitions, adding 129,000 customers. The six acquisitions completed in 2023 added 11,025 customers. At present, there are five pending acquisition deals for a total purchase price of $354 million, which, when completed, will add 211,000 customers to its existing base.
Price Performance
Over the last three months, shares of CWT have gained 10.5% compared with the industry’s 13.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Another Stock to Consider
California Water Service currently has a Zacks Rank #2 (Buy).
GWRS’ long-term (three- to five-year) earnings growth rate is pegged at 15%. The Zacks Consensus Estimate for 2024 earnings of 30 cents per share reflects a year-over-year increase of 3.45%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
California Water Service (CWT) Units Buy Two Water Utilities
California Water Service Group’s (CWT - Free Report) subsidiaries, Hawaii Water Service (Hawaii Water) and New Mexico Water Service (New Mexico Water), have acquired the assets of HOH Utilities, LLC (HOH Utilities) and Monterey Water Company (Monterey), respectively.
The acquisition of HOH Utilities’ wastewater system assets added 1,800 residential, commercial and resort customers, including three hotels, condominiums, multi-family housing, single-family homes and a golf course to its customer base of Hawaii Water.
The buyout of the Monterey water system added 380 residential customers to New Mexico Water’s customer base. The company will also get another 100 undeveloped lots that could also be served in the future upon development.
Timely repairs and maintenance of aging water and wastewater infrastructure are crucial to providing high-quality 24x7 services to customers. Both subsidiaries of California Water Service Group will make essential investments in the acquired assets to provide reliable services to customers and protect the environment.
Fragmented Industry Needs Consolidation
Per the American Society of Civil Engineers, nearly 50,000 community water systems and 16,000 wastewater treatment systems in the United States are presently providing water solutions to customers.
Some of the service providers are too small and have limited financial strength to carry out essential and costly repairs on time, leading to pipeline breakage and disruption of services and increasing the possibility of contamination.
Fragmentation in the water and wastewater industry is a headwind. Large water utility companies continue to acquire small players to ensure the extension of high-quality services to customers and the investments required to upgrade old and acquired assets.
California Water Service Group is expanding operations through inorganic routes. In August 2023, it completed the acquisition of Skylonda Mutual Water Company’s water system assets, which added 156 customers. The ongoing buyouts will further expand its operations.
Other water utilities, like American Water Works (AWK - Free Report) and Essential Utilities (WTRG - Free Report) , are making acquisitions to expand operations.
American Water Works, through its subsidiaries, is making systematic acquisitions and taking essential steps to upgrade the old infrastructure of its acquired assets. It added 7,900 customers till Sep 30, 2023, by acquiring 14 companies.
Essential Utilities has expanded its utility operations by completing several water and wastewater acquisitions, adding 129,000 customers. The six acquisitions completed in 2023 added 11,025 customers. At present, there are five pending acquisition deals for a total purchase price of $354 million, which, when completed, will add 211,000 customers to its existing base.
Price Performance
Over the last three months, shares of CWT have gained 10.5% compared with the industry’s 13.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Another Stock to Consider
California Water Service currently has a Zacks Rank #2 (Buy).
Another top-ranked stock from the same industry is Global Water Resources (GWRS - Free Report) . The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GWRS’ long-term (three- to five-year) earnings growth rate is pegged at 15%. The Zacks Consensus Estimate for 2024 earnings of 30 cents per share reflects a year-over-year increase of 3.45%.