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Middlesex Water (MSEX) to Invest $9.7M in Water Infrastructure

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Middlesex Water (MSEX - Free Report) announced that it is about to initiate a $9.7 million project to upgrade the drinking water infrastructure of Woodbridge, NJ. The company's RENEW project is expected to renovate 18,550 linear feet of water mains, including hydrants, service lines and valves, beginning June 2024.

This is the 29th year of Middlesex Water’s RENEW Program, where it systematically seeks to preserve public health and maintain system resilience by strategically updating water infrastructure, each year in a different neighborhood.

Middlesex's "Knocking Out Lead" Program, which is integrated with RENEW, attempts to remove service lines made of lead or galvanized steel. This complies with the New Jersey law, which mandates that all such lines be replaced by 2031. Customers who fulfill the requirements for the replacement of lead and galvanized water lines incur no direct costs. Future replacement of the identified lead service lines has been planned.

The RENEW Program is set to be completed within eight-nine months, and road restoration by the spring of 2025. The company also aims to install meter pits for exterior meter placement, further enhancing convenience and safety.

Needs for Investments

Aging water and wastewater infrastructure and delays in essential upgrades are concerns for the industry. In order to ensure the extension of high-quality services to customers, investments are needed to upgrade the existing infrastructure. Per the U.S. Environmental Protection Agency, investments of $625 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, to meet the growing demand over the next 20 years.

In order to strengthen its water and wastewater infrastructure in a safe, secure and effective way, Middlesex Water is planning an investment of $226 million between 2024 and 2026.

Peer Moves

Apart from MSEX, other companies like American Water Works Company, Inc. (AWK - Free Report) , California Water Service Group (CWT - Free Report) and Essential Utilities (WTRG - Free Report) are also enhancing their infrastructure through investments.

American Water aims to invest $3.1 billion in 2024, a major portion of which is expected to be utilized for infrastructure improvements in regulated businesses. Over the long term, AWK aims to invest in the range of $16-$17 billion and $34-$38 billion during 2024-2028 and 2024-2033, respectively.

AWK’s long-term (three to five years) earnings growth rate is 8%. The Zacks Consensus Estimate for 2024 EPS implies a year-over-year improvement of 6.9%.

California Water Service has plans to invest more than $380 million in capital expenditures in 2024.

The Zacks Consensus Estimate for CWT’s 2024 EPS implies a year-over-year improvement of 246.2%. The company delivered an average earnings surprise of 85.2% in the last four quarters.

Essential Utilities plans to invest in the range of $1.3-$1.4 billion in 2024 for over 5,000 planned projects and $7.2 billion during 2024-2028 to improve water and natural gas systems. The idea is to better serve customers with the help of improved information technology.

WTRG’s long-term earnings growth rate is 5.75%. The Zacks Consensus Estimate for 2024 EPS implies a year-over-year improvement of 5.9%.

Price Performance

In the past month, shares of the company have lost 1.5% compared with the industry’s 1.7% decline.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

MSEX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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