California Water Service (NYSE:CWT) CWT commences a water main replacement project in Rolling Hills Estates to maintain the reliability and uninterrupted supply of its services. Roughly, the replacement and renovation will take 15 weeks to complete.
The utility will install 4,840 feet of new 6-inch water main and change 87 connections and six aging fire hydrants to improve the flow of water for its customers and fire fighters.
Efforts to Improve Operations
To ensure reliable water and wastewater services, the company is focused on revamping its weathered infrastructure. Prior to this, in April, the company began installing new water main on the streets of Dolores and Eureka, which is likely to be completed in August 2021. Also, in the same month, it started overhauling its water infrastructure in western Torrance. In March, it completed a water infrastructure upgrade in Hamilton City to increase its credibility by providing high-quality services to its customers.
Notably, after investing $298.7 million in 2020, the utility spent $66.8 million in the first three months of 2021. The company reaffirmed its 2021 capital expense estimates within $270-$300 million.
Need for Investments
The aging U.S. water and wastewater infrastructure requires bulk expenditure to ensure 24x7 supply of drinkable water and continuous wastewater services. Without proper infrastructure development, huge volume of water is lost every day in the United States due to mainline breaks. This increases the cost of water services along with the possibility of water contamination. Per the Water and Wastewater Equipment Manufacturers Association, an anticipated $750-billion investment is necessary to maintain and increase the amount of drinking water as well as raise the quality of wastewater services to meet demand over the next 20 years.
Apart from California Water Service, there are other players from the industry, which are investing heavily in infrastructure to upgrade, enhance and maintain the same. Another water utility like American Water (NYSE:AWK) Works AWK has plans to invest $10.4 billion in the 2021-2025 time period and $22-$25 billion in the next decade. Also, Middlesex Water MSEX — under the Water for Tomorrow program — is making regular capital investments to enhance system reliability, resiliency and overall service quality. Essential Utilities (NYSE:WTRG) WTRG has a long-term plan to spend nearly $3 billion through 2023 to rehabilitate and strengthen water as well as natural gas pipeline systems.
Zacks Rank & Price Performance
Shares of this presently Zacks Rank #3 (Hold) player have gained 7.9% in the past six months, outperforming the industry’s rise of 3.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Six-Months Price Performance
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American Water Works Company, Inc. (AWK): Free Stock Analysis Report
California Water Service Group (CWT): Free Stock Analysis Report
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