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PHOENIX - Global Water Resources, Inc. (NASDAQ: GWRS), a water resource management company with a market capitalization of $281.6 million and impressive gross profit margins of 74%, announced the approval of new water rates for its subsidiary in Pima County, Arizona. According to InvestingPro data, the company has maintained a consistent track record of raising dividends for nine consecutive years. The Arizona Corporation Commission (ACC) sanctioned the rate adjustments for Global Water - Farmers Water Company, Inc. (GW-Farmers), which are projected to boost annual revenue by approximately $1.1 million.
The rate increase, based on 2023 test-year service connections, will be phased in over the next year. Customers will see a 50% hike starting May 1, 2025, followed by 25% on November 1, 2025, and the final 25% increment on May 1, 2026. This structured approach aims to facilitate a smoother transition for GW-Farmers’ customers. Based on InvestingPro’s Fair Value analysis, the stock currently appears to be trading above its estimated Fair Value, with analysts setting price targets between $13 and $18.
In addition to the rate rise, the ACC approved the deferral of a $3 million acquisition premium recovery associated with the purchase of GW-Farmers. This cost is set to be recouped in a subsequent rate case. The additional revenue from the new rates is intended to support enhancements to the water utility’s infrastructure and services in the Sahuarita community, as stated by Global Water’s COO, Chris Krygier.
GW-Farmers operates within the Town of Sahuarita, 15 miles south of Tucson, and other unincorporated areas in the county. As of the end of 2024, the utility managed 3,494 active water connections across a 21.0 square mile service area, accounting for 5.4% of Global Water’s total active service connections.
Global Water Resources, known for its Total Water Management (TWM) strategies, operates 32 systems providing water, wastewater, and recycled water services primarily around Phoenix and Tucson. The company has been recognized for its effective water reuse practices and asset management strategies, receiving national accolades and industry awards. With annual revenue of $52.7 million and a "Fair" overall financial health score, investors can access detailed analysis and 6 additional exclusive ProTips through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.
This rate increase is expected to enable Global Water to continue delivering high-quality water services and contribute to the sustainability of water resources in the region. The information provided is based on a press release statement from Global Water Resources.
In other recent news, Global Water Resources reported its fourth-quarter 2024 earnings, revealing a slight miss on earnings per share (EPS) expectations but surpassing revenue forecasts. The company’s EPS was $0.04, falling short of the projected $0.06, while revenue reached $13.29 million, exceeding the anticipated $12.7 million. Additionally, Global Water Resources announced a public stock offering, pricing 2.8 million shares at $10.00 each, aiming to raise approximately $28 million. Roth Capital Partners and Janney Montgomery Scott are the underwriters for this offering. Furthermore, the company has filed applications with the Arizona Corporation Commission for water and wastewater rate increases for two subsidiaries, potentially resulting in a net annual revenue increase of about $6.5 million. Global Water Resources also declared a monthly cash dividend of $0.02533 per common share. These developments highlight the company’s ongoing efforts to enhance its financial position and operational capabilities.
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