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Consolidated Water (CWCO) Rides on Usage of Latest Technology
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Consolidated Water Co. Ltd. (CWCO - Free Report) continues to benefit from the use of the most advanced technology to convert seawater to potable water to meet customer needs. The company is also gaining from expanding operations via acquisitions and organic projects.
However, this Zacks Rank #3 (Hold) company faces risks related to the ongoing delay in the renewal of its license and weather fluctuations.
Tailwinds
Nearly 97% of the earth’s water is in the ocean. To harness this resource, Consolidated Water utilizes Reverse Osmosis Technology, one of the most advanced technologies, to convert seawater to potable water at all water treatment plants it constructs and operates. This should help the company to further boost its performance.
Consolidated Water aims to expand its operations in complementary service industries, which should complement its existing business operations. The company is likely to pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.
CWCO operates 10 water production plants with a capacity of 24.9 million gallons per day in three countries. It is looking for opportunities in new markets to further expand drinking water and wastewater services. The company is also working relentlessly to boost its existing operations in the Cayman Islands and the Bahamas.
Headwinds
The company’s exclusive license to provide water to retail customers in the Cayman Islands has not been expressly extended and CWCO is presently unable to predict the outcome of its ongoing negotiations relating to this license. This problem can adversely impact its operations and lower revenues.
CWCO sells more water during the first and second quarters of the year, when the number of tourists is greater and local rainfall is less (in its service territories) compared with the third and fourth quarters. The greater-than-expected rainfall during the first half can adversely impact the company’s operational results and cash flows.
Price Performance
In the past year, the stock has returned 19.5% against the industry’s decline of 5.6%.
The Zacks Consensus Estimate for CWT’s 2024 earnings per share (EPS) implies growth of 246.2% year over year. It delivered an average earnings surprise of 85.2% in the last four quarters.
PRMW’s long-term (three to five years) earnings growth rate is 15.47%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 53.2%.
CNP’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 8%.
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Consolidated Water (CWCO) Rides on Usage of Latest Technology
Consolidated Water Co. Ltd. (CWCO - Free Report) continues to benefit from the use of the most advanced technology to convert seawater to potable water to meet customer needs. The company is also gaining from expanding operations via acquisitions and organic projects.
However, this Zacks Rank #3 (Hold) company faces risks related to the ongoing delay in the renewal of its license and weather fluctuations.
Tailwinds
Nearly 97% of the earth’s water is in the ocean. To harness this resource, Consolidated Water utilizes Reverse Osmosis Technology, one of the most advanced technologies, to convert seawater to potable water at all water treatment plants it constructs and operates. This should help the company to further boost its performance.
Consolidated Water aims to expand its operations in complementary service industries, which should complement its existing business operations. The company is likely to pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.
CWCO operates 10 water production plants with a capacity of 24.9 million gallons per day in three countries. It is looking for opportunities in new markets to further expand drinking water and wastewater services. The company is also working relentlessly to boost its existing operations in the Cayman Islands and the Bahamas.
Headwinds
The company’s exclusive license to provide water to retail customers in the Cayman Islands has not been expressly extended and CWCO is presently unable to predict the outcome of its ongoing negotiations relating to this license. This problem can adversely impact its operations and lower revenues.
CWCO sells more water during the first and second quarters of the year, when the number of tourists is greater and local rainfall is less (in its service territories) compared with the third and fourth quarters. The greater-than-expected rainfall during the first half can adversely impact the company’s operational results and cash flows.
Price Performance
In the past year, the stock has returned 19.5% against the industry’s decline of 5.6%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same sector are California Water Service Group (CWT - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Primo Water (PRMW - Free Report) and CenterPoint Energy (CNP - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CWT’s 2024 earnings per share (EPS) implies growth of 246.2% year over year. It delivered an average earnings surprise of 85.2% in the last four quarters.
PRMW’s long-term (three to five years) earnings growth rate is 15.47%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 53.2%.
CNP’s long-term earnings growth rate is 7%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 8%.