Water Investments: How to Invest in Water

**California Water Service Group (CWT) is a compelling investment opportunity in the water utility sector.** Here's why: 1. **Strategic Position in a Growing Market**: CWT is the third-largest publicly traded company in the U.S. water utility sector, serving 2.1 million people across multiple states. The U.S. water and wastewater services market is projected to grow at a CAGR of 6% to 8% over the next 5-7 years. This growth is driven by investments in infrastructure and the need for water treatment, which positions CWT well for long-term expansion. 2. **Regulatory and Rate Case Developments**: CWT is currently awaiting a decision on its General Rate Case from the California Public Utilities Commission. This case could lead to a 12% rate base growth, which would significantly impact the company's revenue. Such regulatory approvals can provide a catalyst for stock price appreciation. 3. **Dividend and Valuation**: CWT offers a dividend yield of 2.57% forward, which is attractive for income-seeking investors. The company's P/E ratios are 20.47 (LTM) and 19.14 (FWD), indicating that it is trading at a reasonable valuation compared to its earnings. With a market cap of $2.8 billion, CWT is a substantial player in its sector, offering stability and potential for capital appreciation. 4. **Sector Resilience and Future Prospects**: Water utilities are often considered defensive stocks, providing stability during market volatility. CWT's business model, focused on essential water services, ensures consistent demand and revenue streams. The company's focus on regulated assets and the expected growth in the water market align with favorable long-term trends. In conclusion, California Water Service Group (CWT) stands out as a strong candidate for investment within the water utility sector. Its strategic location in a growing market, regulatory developments, attractive dividend, and reasonable valuation make it a compelling choice for investors seeking both income and capital appreciation.