Connecticut Water Service, Inc. (CTWS) has announced its full-year 2014 capital spending guidance. The board of directors of the company has approved of a total investment of $45.6 million under its capital spending program for 2014.
Per the plan, Connecticut Water will allocate $37.8 million for its regulated utility subsidiary, The Connecticut Water Company and the rest will be utilized for operations in the state of Maine.
In Connecticut, the company will be investing $15 million under the Water Infrastructure and Conservation Adjustment Program to replace existing pipeline.
Connecticut Water expects to legally complete the merger of Biddeford & Saco Water Company with its unit The Maine Water Company (“Maine Water”) in 2013. The company plans to allot $2.7 million for changing pipeline and infrastructure in Maine through the Water Infrastructure Surcharge.
We note that the company continues to invest substantially to improve its existing infrastructure. In the last six months, the company replaced its ageing water main in Enfield and Canton to improve system reliability and water flows.
Consequently, Connecticut Water continues to increase its capital spending level. In 2012, the company’s capital expenditure was $24.7 million. During the first nine months of 2013, the company invested $22.7 million and intends to deploy a total of $31.3 million in 2013. We believe a continuous rise in capital spending is primarily due to higher investment in infrastructure improvement activities.
This infrastructure upgrade program will enable Connecticut Water to provide uninterrupted services to its customers while strengthening system competence. These factors will subsequently improve reliability, consumer confidence, public safety and also maintain the state as well as federal water quality regulations.
Clinton, Conn.-based Connecticut Water currently has a Zacks Rank #2 (Buy). Other stocks from the industry that are presently performing well include Middlesex Water Co. (MSEX) with a Zacks Rank #1 (Strong Buy), and American Water Works Company, Inc. (AWK) and California Water Service Group (CWT), each with a Zacks Rank #2 (Buy).
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