CWT Or AWR: Which Water Utility Stock Is A Better Pick?
Zacks Investment Research | Mar 19, 2019 10:25PM ET
The U.S. water infrastructure is quite old, and massive investment is required to fix the existing water and wastewater systems. Some of the water mains are nearly a century old and require immediate replacement. Per an American Water Works Association (“AWWA”) report, the cost of restoring aging underground water pipelines in the United States will be at least $1 trillion over the next 25 years.
All the regulated water utilities are investing to strengthen operation and recoup the same through rate hikes. The demand for potable water and wastewater services is steadily increasing, in turn creating ample opportunities for growth and expansion of the industry.
There are more than 53,000 water systems in the United States, providing water solutions to customers. The highly fragmented water industry creates operational challenges in meeting increasing requirement for water. Hence, consolidation in the fragmented industry and regular investments are need of the hour to extend quality services to customers.
Against this backdrop, we run a comparative analysis on two water utilities — California Water Service Group (NYSE:CWT) and American States Water Company (NYSE:AWR) — to ascertain which one performed better and is a suitable investment option right now.
Both the stocks currently carry a Zacks Rank #3 (Hold). You can seeZacks Investment Research
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