California Water Service: Interest Rates Are A Headwind (Rating Downgrade)

California Water Service Group is a dependable dividend grower, now marking 58 consecutive annual increases. Its stock has outperformed most water utility peers YTD, but the valuation has crept up a bit. Rising interest rates and a worsening yield spread versus treasuries make California Water Service less attractive as a bond proxy at current prices. I downgrade shares to a hold, preferring a lower entry point near $40 and a 3% yield given current macro conditions.

Founded in 1926, utility company California Water Service Group ( CWT ) turned 100 years old this year. It has grown substantially over the decades; it now serves parts of Washington, New Mexico, Texas, and Hawaii in addition to its