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1. Company Snapshot

1.a. Company Description

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.


The company produces and supplies water to end-users, including residential, commercial, and government customers, as well as government-owned distributors.It also provides design, engineering, construction, procurement, and management services for desalination projects and water treatment plants, as well as management and engineering services relating to municipal water distribution and treatment.In addition, the company manufactures and services a range of water-related products, including reverse osmosis desalination equipment, membrane separation equipment, filtration equipment, piping systems, vessels, and custom fabricated components; and provides design, engineering, consulting, management, inspection, training, and equipment maintenance services for commercial, municipal, and industrial water production, supply, and treatment, as well as desalination and wastewater treatment.


Consolidated Water Co. Ltd.was incorporated in 1973 and is headquartered in Grand Cayman, the Cayman Islands.

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1.b. Last Insights on CWCO

The recent 3-month performance of Consolidated Water Co. Ltd. was driven by a series of positive developments. The company's Q1 2025 earnings release showcased strong momentum in its desalination and service expansion segments, contributing to its growth prospects. Additionally, the recent 47.4% dividend hike demonstrates the company's commitment to enhancing shareholder value. Furthermore, the options market's recent movements suggest a potential spike in the stock, indicating investor optimism.

1.c. Company Highlights

2. Consolidated Water's Q3 2025 Earnings Shine with 5% Revenue Growth

Consolidated Water Company's (CWCO) diversified water business model delivered strong performance in Q3 2025, with revenue increasing 5% to $35.1 million from $33.4 million in Q3 2024. The increase was driven by retail services and manufacturing segments. Gross profit was $12.9 million, or 37% of total revenue, compared to $11.6 million or 35% of total revenue in Q3 2024. Net income from continuing operations attributable to CWCO stockholders was $5.6 million, or $0.34 per diluted share, beating analyst estimates of $0.24.

Publication Date: Dec -02

📋 Highlights
  • ...: ...
  • Revenue Growth:: Q3 2025 revenue increased 5% to $35.1 million, driven by a 6% rise in water volume sold in the Cayman Islands and a 7% growth in manufacturing revenue to $4.7 million.
  • Gross Profit Expansion:: Gross profit rose to $12.9 million (37% of revenue) from $11.6 million (35% of revenue) in Q3 2024, reflecting operational efficiency improvements.
  • Strong Cash Position:: Consolidated Water held $123.6 million in cash and $141.7 million in working capital, with no significant debt, enabling strategic investments for shareholder value.
  • New Projects & Expansion:: Two new water treatment plant projects valued at $15.6 million were awarded, alongside a 17,500 sq ft manufacturing facility expansion to boost production capacity.
  • Margin Improvements:: Gross profit margin increased 3 percentage points to 37%, with higher-margin nuclear work expected to further enhance gross profit dollars in the future.

Segment Performance

The company's services segment saw healthy growth, driven by two construction projects underway in 2025 and steady gains from recurring O&M contracts. Two new water treatment plant construction projects were awarded in Q3, valued at approximately $15.6 million. The manufacturing segment maintained its positive momentum, with a new 17,500 square foot facility expansion completed, expected to enhance efficiency and throughput.

Cash Position and Growth Prospects

CWCO's cash and cash equivalents totaled $123.6 million, and working capital was $141.7 million, with no significant outstanding debt. The company continues to evaluate ways to use its ample cash balances to increase shareholder value. The Hawaii desalination plant project is progressing, with the design 100% complete, and the company focused on obtaining the remaining permits needed to commence construction early next year.

Operational Enhancements

The company has renovated a new assembly area in their facility, improving workflow and allowing for the construction of larger units. This change is expected to be a "huge improvement" to the facility's workflow. The old shop will be used exclusively for fabricating products, piping, and plate.

Margin Expansion and Valuation

The company reported a 3-point increase in gross profit this quarter. With a P/E Ratio of 33.63 and an EV/EBITDA of 16.26, investors are pricing in significant growth prospects. Analysts estimate next year's revenue growth at 52.4%, indicating a strong outlook for the company. The ROE of 7.44% and ROIC of 6.45% suggest that the company is generating returns on its investments, justifying the current valuation multiples.

3. NewsRoom

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Consolidated Water Declares First Quarter Cash Dividend

Nov -21

Source: globenewswire.com

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Aviva PLC Makes New Investment in Consolidated Water Co. Ltd. $CWCO

Nov -14

Source: defenseworld.net

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Consolidated Water Q3 Earnings and Sales Surpass Estimates

Nov -12

Source: zacks.com

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Consolidated Water Co. Ltd. (CWCO) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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Consolidated Water (CWCO) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Nov -11

Source: zacks.com

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Consolidated Water Reports Third Quarter 2025 Results

Nov -10

Source: globenewswire.com

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Buy 5 Low-Beta Utility Stocks to Dodge Ongoing Market Volatility

Nov -07

Source: zacks.com

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Here's Why Consolidated Water (CWCO) Fell More Than Broader Market

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.40%)

6. Segments

Services

Expected Growth: 7.3%

Consolidated Water Co. Ltd.'s 7.3% growth is driven by increasing demand for desalination services, expansion into new markets, and strategic acquisitions. Growing need for clean water, particularly in the Caribbean and Latin America, fuels revenue growth. Additionally, the company's diversified services, including engineering, procurement, and construction, contribute to its growth momentum.

Bulk

Expected Growth: 7.43%

Consolidated Water Co. Ltd.'s 7.43% growth is driven by increasing demand for desalination services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on renewable energy and water conservation efforts contributes to its growth. Furthermore, the rising need for clean water and wastewater treatment in the Caribbean and Latin America regions also supports the company's growth momentum.

Retail

Expected Growth: 7.43%

Consolidated Water Co. Ltd.'s 7.43% retail growth is driven by increasing demand for desalination services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on water conservation and efficient operations has led to cost savings, which are being reinvested in growth initiatives. Furthermore, government incentives for water infrastructure development have also contributed to the segment's growth.

Manufacturing

Expected Growth: 7.9%

Consolidated Water Co. Ltd.'s 7.9% growth in manufacturing is driven by increasing demand for desalination and water treatment solutions, expansion into new markets, and strategic acquisitions. Additionally, investments in technology and process improvements have enhanced operational efficiency, contributing to the company's growth momentum.

7. Detailed Products

Seawater Desalination Plants

Design, construction, and operation of seawater desalination plants that produce fresh water from seawater

Brackish Water Desalination Plants

Design, construction, and operation of brackish water desalination plants that produce fresh water from brackish water

Wastewater Treatment Plants

Design, construction, and operation of wastewater treatment plants that treat and recycle wastewater

Water Reuse Systems

Design, construction, and operation of water reuse systems that treat and reuse wastewater

Bottled Water

Production and distribution of bottled water

Bulk Water Supply

Supply of bulk water to municipalities, industries, and other customers

8. Consolidated Water Co. Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Consolidated Water Co. Ltd. operates in a niche market, providing water services to the Cayman Islands. While there are some substitutes available, such as rainwater harvesting systems, they are not yet widely adopted, and the company's services remain in high demand.

Bargaining Power Of Customers

The company's customers, primarily residential and commercial users, have limited bargaining power due to the lack of alternative water service providers in the Cayman Islands.

Bargaining Power Of Suppliers

The company relies on a few suppliers for its equipment and materials, giving them some bargaining power. However, the company's long-term contracts and relationships with suppliers mitigate this risk.

Threat Of New Entrants

The barriers to entry in the water services market in the Cayman Islands are high, including significant capital expenditures and regulatory hurdles, making it unlikely for new entrants to disrupt the market.

Intensity Of Rivalry

The company operates in a monopolistic market, with limited competition, resulting in a low intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.45%
Debt Cost 4.69%
Equity Weight 99.55%
Equity Cost 4.69%
WACC 4.69%
Leverage 0.45%

11. Quality Control: Consolidated Water Co. Ltd. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Aris Water Solutions

A-Score: 6.0/10

Value: 6.0

Growth: 8.6

Quality: 4.7

Yield: 5.0

Momentum: 8.5

Volatility: 3.3

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Consolidated Water Co

A-Score: 5.9/10

Value: 2.4

Growth: 8.0

Quality: 6.5

Yield: 3.0

Momentum: 8.5

Volatility: 7.3

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Artesian Resources

A-Score: 5.7/10

Value: 6.2

Growth: 4.7

Quality: 5.3

Yield: 7.0

Momentum: 2.0

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SJW

A-Score: 5.5/10

Value: 6.4

Growth: 5.6

Quality: 6.9

Yield: 4.0

Momentum: 3.5

Volatility: 6.7

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Middlesex Water

A-Score: 4.9/10

Value: 3.7

Growth: 5.7

Quality: 6.4

Yield: 4.0

Momentum: 2.0

Volatility: 7.7

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Global Water Resources

A-Score: 4.9/10

Value: 4.0

Growth: 4.8

Quality: 6.6

Yield: 4.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.12$

Current Price

34.12$

Potential

-0.00%

Expected Cash-Flows