Consolidated Water Co. Ltd.
CWCO
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
.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry include
Global Water Resources
GWRS
,
Essential Utilities
WTRG
and
American Water Works
AWK
.
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.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022?
Last year’s 2021
Zacks Top 10 Stocks
portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys
Access Zacks Top 10 Stocks for 2022 today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report