Consolidated Water Raises Shareholders' Value, Hikes Dividend by 47.4%

Consolidated Water Co. Ltd. CWCO announced that its board of directors has approved a year-over-year increase in the quarterly dividend rate by 47.4% from 9.5 cents in third-quarter 2024. The revised quarterly dividend will be 14 cents per share, payable on July 31, 2025, to its shareholders of record at the close of business on July 1. 

This dividend of 14 cents per share represents a sequential increase of 27.3% from the second-quarter 2025 dividend of 11 cents.

The company’s new annualized dividend rate is 56 cents per share and the current dividend yield is 2.26%, which is better than the S&P 500 composite’s average of 1.57%.

Consolidated Water has raised its dividend three times in the last five years. Its annualized dividend growth rate (five years) is currently pegged at 4.74%. More details relating to CWCO’s dividend are available here.

Consolidated Water’s continued strong and stable financial performance across its retail, bulk and manufacturing segments has boosted cash flow and overall liquidity. The cash received from last year’s Mexico arbitration settlement and a favorable outlook for its services segment have prompted CWCO’s board of directors to approve an increase in its quarterly dividend.

Can Consolidated Water Sustain Dividend Hikes?

Consolidated Water operates 10 desalination water production plants with a capacity of 26.2 million gallons per day in four countries. It is looking for opportunities in new markets to further expand drinking water and wastewater services. The company has also been working relentlessly to boost existing operations in the Cayman Islands and the Bahamas. The company’s new $204-million design-build-operate project in Hawaii is currently underway. The construction phase is expected to generate the largest portion of revenues from this project and be a major growth driver for the Services segment in 2026 and 2027.

Consolidated Water aims to expand its operations in complementary service industries, which will complement its existing business operations. The company will pursue these opportunities either on its own or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.

The U.S. desalination market is expected to reach $2.6 billion by 2028, at a CAGR of 8.3%. This development will bode well for the company’s prospects, given its focus on the development of desalination plants. Consolidated Water will capitalize on the rising demand as it is known for low-cost installation and the ability to treat all types of feed water to make those usable. CWCO is also set to benefit from the increasing use of membrane technology to remove impurities in water, eliminate toxic contaminants and produce pure water.

The above factors will enable the company to perform steadily and generate additional funds for payment and increase dividends.

Utilities Continue to Reward Shareholders

Domestic-focused, rate-regulated water utilities are stable performers, which allows them to reward shareholders through dividend hikes and share buybacks. Other water utilities, such as Essential Utilities WTRG, American Water Works AWK and California Water Service Group CWT, have raised dividend rates during 2025.

The current dividend yields of WTRG, AWK and CWT are 3.38%, 2.32% and 2.54%, respectively, which are higher than the S&P 500 composite’s yield of 1.57%.

CWCO’s Price Movement

In the past month, CWCO’s shares have risen 17.6% against its industry’s 2.7% decline.

CWCO’s Zacks Rank

Consolidated Water currently has a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


 

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This article originally published on Zacks Investment Research (zacks.com).

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