CWCO - Global Water Resources: Micro-Cap Water Utility With Potential But There Are Risks
Thesis
Water utilities have characteristics that are desirable for many dividend growth investors. They often have a monopoly in their service areas limiting competition and giving them a moat. They provide a necessary service that has little risk of technological obsolescence. Water and wastewater service are required for almost all residential and commercial buildings. This combination often leads to slowly growing top and bottom lines that in turn drives long-term dividend growth. But saying that, the market has largely recognized these positive characteristics. Hence, most water utilities are trading at historically low dividend yields and