California Water Service Group (NYSE:CWT)
The Company is a holding company with five operating subsidiaries which provides domestic water services to customers for outdoor purposes and some non-regulated services to private companies and municipalities.
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Water is the most precious natural resource on Earth. We are down to 1% useable water on Earth now and droughts are popping up everywhere water is becoming more expensive and in all reality our entire exsistance as humans. Did I mention that no matter what alternative energy we go to water is going to be in high demand? Think about how expensive electrolisys is for hydrogen, or watering crops for ethanol. So a company that benefits holding a material where we are down to 1% of and no one has really flinched (opposed to being down to about 15% of oil) can't be a bad idea. Oh ya their managment led them to beating the S&P by about 50% over the worst year of memory.
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This company is very stable and has sound financials. With a 16.85% 2008Q3 profit margin and recent water rate increases, I feel this stock will continue to deliver a decent return. This stock also yields a decent 2.9% dividend, payable quarterly. While the S&P continues to slide over the next quarter, I believe this stock will continue to outperform.
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ibd
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The best of the best so far
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I live in california, so i might as well make some money back on all the water bills I pay. Plus it doesnt hurt to have bills on the floor to help pay for revamping the structure.
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California Water Service Group (CWS) is a holding company that provides water utility and other related services in California, Washington, New Mexico and Hawaii through its wholly owned subsidiaries. The company's regulated business involves the production, purchase, storage, treatment, testing, distribution and sale of water for domestic, industrial, public and irrigation uses, and for fire protection. Its non-regulated business includes full water system operation, billing and meter reading services, as well as the lease of communication antenna sites, lab services, water rights brokerage, and its Extended Service Protection program.
The company financial performance has been less than inspiring to say the least. During 2005, the company delivered 132 billion gallons of water to its customers, down 3% from the 139 billion gallons delivered in 2004. Endorsing the same, its top line and bottom-line growth has been flat in 2006. However, it may be on the cusp of exciting times ahead as the operating environment for the company never looked so good.
Going forward the operational driver for this stock would be the improvement in the regulatory environment in California and the strategic driver would be the new U.S Environmental regulation and a dated water transmission infrastructure would act as a catalyst for consolidation in the industry. The company being the 2nd largest water utility company in the country can hope to come across favorable acquisition opportunities.
CWS is a regular dividend paying company with stable operational cash flows. In an environment where flight to quality syndrome has kicked in stocks like these may find favor. Thus this stock may not fly away but still has the potential to outperform especially if liquidity concern surfaces again. This might be good defensive stock that one might like to have in its portfolio for turbulent times.
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It is just a good business providing an vital service...
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THE STOCK IS BUILDING AND CALIFORNIA IS IN CONSTANT NEED AS WELL AS THE REST OF THE COUNTRY FOR WATER. THEIR IS LESS DRINKABLE WATER THAN THEIR IS OIL.
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Water is the next oil, help me find value! I know this isn't the best but it is a start...
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Valuation is nuts for a utility with no growth prospects
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