Consolidated Water Co. Ltd. (NASDAQ:CWCO) is poised to capitalize on the resurgence of tourism in the Cayman Islands, and the ongoing uptick in tourist activities is expected to fuel its earnings growth. Leveraging Reverse Osmosis, an advanced water purification technology, to convert seawater into drinkable water across all its treatment facilities is bolstering its operational excellence.

Here are compelling factors that underscore why this stock warrants serious consideration as an investment choice. 

Impressive Growth Estimates & Long-Term Potential:

CWCO’s earnings per share (EPS) projections for 2023 and 2024 have both risen by 1.1% and 2.1%, respectively, within the past 60 days.

The consensus estimate for 2023 sales stands at $132.3 million, indicative of a robust year-over-year expansion of 40.5%.

Consolidated Water anticipates a noteworthy long-term (three- to five-year) earnings growth rate of 8%.

Solid Return on Equity (ROE):

A company’s Return on Equity (ROE) is a key gauge of its efficient utilization of capital to generate superior returns. Presently, CWCO boasts an ROE of 8.98%, surpassing the sector’s average of 6.46%. This underscores CWCO’s effective allocation of funds, outperforming its peers within the utility sector.

Strong Financial Position & Liquidity:

By the close of the second quarter in 2023, CWCO’s total debt to capital ratio stood at a mere 0.2%, significantly superior to the industry norm of 48.2%.

The company’s current ratio at the end of Q2 was a robust 3.72, surpassing the industry average of 0.92. This indicates CWCO’s substantial capacity to meet short-term debt obligations with ease.

Consistent Dividend History:

With a solid track record of paying dividends since 1997, Consolidated Water has demonstrated its commitment to enhancing shareholder value. The company’s quarterly dividend stands at 8.5 cents per share, translating to an annualized dividend of 34 cents per share. As of now, the dividend yield is an attractive 1.5%.

Noteworthy Price Performance:

Over the past year, CWCO stock has delivered an impressive return of 63.3%, outperforming the industry’s decline of 6.7%. This signifies CWCO’s strong market performance and reinforces its potential as an investment avenue.

Consolidated Water’s adept handling of the tourism rebound, coupled with its advanced purification technology and solid financial fundamentals, positions it as an enticing addition to any investment portfolio. With favorable growth prospects and a history of delivering shareholder value, CWCO represents an opportunity worth considering for discerning investors.

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