Consolidated Water (NasdaqGS:CWCO) - Share price, News & Analysis

Q: What is the Fair Price of CWCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CWCO ($15.1) is trading above our estimate of [[fair value]] ($15.08)

CWCO fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	1/6
Past Performance	0/6
Financial Health	6/6
Dividends	4/6

CWCO Stock Overview

Rewards

Revenue is forecast to grow 13.59% per year

Risk Analysis

Earnings have declined by 0.2% per year over past 5 years

Dividend of 2.25% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (6.4%) are lower than last year (9.7%)

+ 1 more risk

Consolidated Water Competitors

Pure Cycle

NasdaqCM:PCYO

US$254.0m

Global Water Resources

NasdaqGM:GWRS

US$342.2m

Artesian Resources

NasdaqGS:ARTN.A

US$503.2m

York Water

NasdaqGS:YORW

US$603.9m

Price History & Performance

Summary of all time highs, changes and price drops for Consolidated Water
Historical stock prices
Current Share Price	US$15.10
52 Week High	US$15.78
52 Week Low	US$9.01
Beta	0.22
1 Month Change	6.34%
3 Month Change	41.12%
1 Year Change	20.42%
3 Year Change	6.94%
5 Year Change	22.27%
Change since IPO	705.33%

Recent News & Updates

Jun 13

Consolidated Water: The Easy Money Has Been Made

Consolidated Water has performed exceptionally well in recent months, benefiting from its low share price and recently-improving bottom line. The company has also managed to land some contracts that will add value to shareholders moving forward. At present, the company looks to be more or less fairly valued at this point in time.

Jun 07

Consolidated Water (NASDAQ:CWCO) Has Re-Affirmed Its Dividend Of US$0.085

Consolidated Water Co. Ltd. ( NASDAQ:CWCO ) will pay a dividend of US$0.085 on the 29th of July. The dividend yield...

Shareholder Returns

	CWCO	US Water Utilities	US Market
7D	-2.9%	-0.5%	1.0%
1Y	20.4%	-8.9%	-12.9%

Return vs Industry: CWCO exceeded the US Water Utilities industry which returned -8.9% over the past year.

Return vs Market: CWCO exceeded the US Market which returned -12.8% over the past year.

Price Volatility

Is CWCO's price volatile compared to industry and market?
CWCO volatility
CWCO Average Weekly Movement	6.1%
Water Utilities Industry Average Movement	4.2%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CWCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CWCO's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1973	197	Rick McTaggart	https://www.cwco.com

Consolidated Water Co. Ltd., together with its subsidiaries, designs, constructs, manages, and operates water production and water treatment plants primarily in the Cayman Islands, the Bahamas, and the United States. The company operates through four segments: Retail, Bulk, Services, and Manufacturing. It uses reverse osmosis technology to produce potable water from seawater.

Consolidated Water Fundamentals Summary

How do Consolidated Water's earnings and revenue compare to its market cap?
CWCO fundamental statistics
Market Cap	US$230.81m
Earnings (TTM)	US$4.46m
Revenue (TTM)	US$69.32m

51.7x

P/E Ratio

3.3x

P/S Ratio

Is CWCO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CWCO income statement (TTM)
Revenue	US$69.32m
Cost of Revenue	US$44.79m
Gross Profit	US$24.53m
Other Expenses	US$20.06m
Earnings	US$4.46m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 12, 2022

Earnings per share (EPS)	0.29
Gross Margin	35.38%
Net Profit Margin	6.44%
Debt/Equity Ratio	0.1%

How did CWCO perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

116%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CWCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CWCO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CWCO. This is calculated by dividing CWCO's market cap by their current preferred multiple.
What is CWCO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$230.81m

CWCO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.8x
Enterprise Value/EBITDA	15.7x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does CWCO's PE Ratio compare to its peers?

CWCO PE Ratio vs Peers

The above table shows the PE ratio for CWCO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	44.7x
PCYO Pure Cycle	43.2x	n/a	US$254.0m
GWRS Global Water Resources	72.6x	-1.1%	US$342.2m
ARTN.A Artesian Resources	28.7x	n/a	US$503.2m
YORW York Water	34.2x	n/a	US$603.9m
CWCO Consolidated Water	51.7x	n/a	US$230.8m

Price-To-Earnings vs Peers: CWCO is expensive based on its Price-To-Earnings Ratio (51.7x) compared to the peer average (44.7x).

Price to Earnings Ratio vs Industry

How does CWCO's PE Ratio compare vs other companies in the Global Water Utilities Industry?

Price-To-Earnings vs Industry: CWCO is expensive based on its Price-To-Earnings Ratio (51.7x) compared to the US Water Utilities industry average (37.7x)

Price to Earnings Ratio vs Fair Ratio

What is CWCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CWCO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	51.7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate CWCO's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of CWCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CWCO ($15.1) is trading above our estimate of fair value ($15.08)

Significantly Below Fair Value: CWCO is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Consolidated Water forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.6%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if CWCO's forecast earnings growth is above the savings rate (1.9%).

Earnings vs Market: Insufficient data to determine if CWCO's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if CWCO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CWCO's revenue (13.6% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: CWCO's revenue (13.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if CWCO's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Consolidated Water performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-0.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CWCO has a large one-off loss of $2.9M impacting its March 31 2022 financial results.

Growing Profit Margin: CWCO's current net profit margins (6.4%) are lower than last year (9.7%).

Past Earnings Growth Analysis

Earnings Trend: CWCO's earnings have declined by 0.2% per year over the past 5 years.

Accelerating Growth: CWCO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CWCO had negative earnings growth (-33.4%) over the past year, making it difficult to compare to the Water Utilities industry average (-2.3%).

Return on Equity

High ROE: CWCO's Return on Equity (3.1%) is considered low.

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Financial Health

How is Consolidated Water's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CWCO's short term assets ($79.3M) exceed its short term liabilities ($8.4M).

Long Term Liabilities: CWCO's short term assets ($79.3M) exceed its long term liabilities ($3.5M).

Debt to Equity History and Analysis

Debt Level: CWCO has more cash than its total debt.

Reducing Debt: CWCO's debt to equity ratio has reduced from 0.6% to 0.1% over the past 5 years.

Debt Coverage: CWCO's debt is well covered by operating cash flow (5253%).

Interest Coverage: CWCO earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Consolidated Water current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.25%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CWCO's dividend (2.25%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: CWCO's dividend (2.25%) is low compared to the top 25% of dividend payers in the US market (4.09%).

Stability and Growth of Payments

Stable Dividend: CWCO's dividends per share have been stable in the past 10 years.

Growing Dividend: CWCO's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (116.1%), CWCO's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (60.6%), CWCO's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

12.9yrs

Average management tenure

CEO

Rick McTaggart (59 yo)

21.83yrs

Tenure

US$907,150

Compensation

Mr. Frederick W. McTaggart, also known as Rick, has been a Director of Consolidated Water Co. Ltd. since 1998. He has been the Chief Executive Officer of Consolidated Water Co. Ltd.since January 1, 2004 a...

CEO Compensation Analysis

Compensation vs Market: Rick's total compensation ($USD907.15K) is below average for companies of similar size in the US market ($USD1.67M).

Compensation vs Earnings: Rick's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CWCO's management team is seasoned and experienced (12.9 years average tenure).

Board Members

Experienced Board: CWCO's board of directors are seasoned and experienced ( 27.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CWCO insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31