Cadiz: A Water Solution Stock That Keeps on Rising

Despite a recent dip of US$45 million, Cadiz (NASDAQ:CDZI) shareholders are still up a whopping 96% over the past three years. So, what's the secret sauce behind this water solutions company's resilience? Let's dive in!

First things first, Cadiz isn't your average water company. They're a California water solutions company dedicated to providing access to clean water through a combination of water supply, storage, pipeline, and treatment solutions. With a market cap of US$271.20 million and a enterprise value of US$333.97 million, Cadiz has been making waves in the water industry.

Now, let's talk about that 96% gain. Cadiz's share price has been on a rollercoaster ride, but it's clear that the company's strategic initiatives and financial performance have driven its stock price appreciation over the long term. Here are a few key factors contributing to Cadiz's success:

1. Water Supply Agreements: Cadiz has secured several water supply agreements, such as the 10,000 acre-feet per year (AFY) deal via the Northern Pipeline at a price not to exceed $1,650 per AFY. These agreements provide a stable revenue stream and demonstrate the company's ability to deliver water solutions to its clients.
2. Expansion of Water Infrastructure: Cadiz has been expanding its water infrastructure, including the acquisition of a 220-mile idle gas pipeline from El Paso Natural Gas. This pipeline, once converted to carry water, will significantly increase Cadiz's water delivery capacity. The company anticipates project design, engineering, and development of the Northern Pipeline to take place in 2024, with construction beginning in 2025 and water delivery as early as 2026.
3. Strategic Partnerships: Cadiz has formed strategic partnerships with companies like Heerema International Group Services SA, which led a $57 million credit agreement to support the development and construction of water supply projects. These partnerships provide Cadiz with the financial resources and expertise needed to execute its projects and grow its business.
4. Diversification of Business Activities: Cadiz has diversified its business activities by acquiring ATEC Water Systems, a producer of specialized groundwater filtration systems. This acquisition allows Cadiz to offer a broader range of water solutions to its clients and tap into new markets.
5. Strong Leadership: Susan Kennedy, the Chairman and CEO of Cadiz, has been instrumental in driving the company's growth and strategic initiatives. Her vision and leadership have contributed to Cadiz's success and have likely instilled confidence in shareholders.

So, what's next for Cadiz? The company is set to participate in the iAccess Alpha Virtual Best Ideas Winter Conference 2024 on December 10, 2024, where management will present and host 1x1 meetings. Additionally, Cadiz has declared quarterly dividends for Q3 and Q4 2024 on its Series A Cumulative Perpetual Preferred Stock. The company is also expected to provide an update on its corporate milestones and 2025 objectives in an upcoming investor call.

In conclusion, Cadiz's water solutions business has played a significant role in its resilience during market downturns and economic uncertainty. Despite the recent dip, shareholders are still up 96% over the past three years, thanks to the company's strategic initiatives, financial performance, and strong leadership. As Cadiz continues to expand its water infrastructure and form strategic partnerships, investors can expect the company to keep on rising.