The S&P 500 and Dow Jones Industrial Average are both in the red today, but shares of Select Water Solutions (WTTR +1.01%) are swimming in the other direction. The water services company reported fourth-quarter financial results yesterday after the market closed, and investors are expressing their approval today, sending the stock considerably higher.
Ad of 11:46 a.m. ET on Wednesday, shares of Select Water Solutions were up 11.9%, retreating slightly from their earlier rise of 15.3%.
NYSE: WTTR
Key Data Points
A strong fourth quarter capped off a record-setting year
Reporting fourth-quarter 2023 diluted earnings per share (EPS) of $0.27, Select Water Solutions crushed analysts' expectations of $0.15. But this surprising performance on the bottom line last quarter was just a drop in the bucket.
The company had an impressively strong year overall. It set records in several metrics for 2023: consolidated revenue; net income; adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and operating cash flow.
It's not only the recent performance that thrilled investors, though. Management highlighted two projects nearing completion that should contribute to continued growth. In the first quarter of 2024, Select Water Solutions expects to complete the pipeline at the Delaware Basin Recycling System project, and it anticipates completing expansion of the throughput capacity and storage capacity of a recycling facility in the Midland Basin.
This water stock provides another option for energy exposure
Because Select Water Solutions services the energy industry, the stock provides a viable way for investors to add a company directly tied to the oil and gas industry, mitigating the risk of investing in a single energy company. For example, it includes several oil supermajors as well as other industry leaders among its customers.
Despite the stock's recent rise, Select Water Solutions is trading at 14.6 times trailing earnings, and it remains an appealing option for those interested in exposure to the energy industry.
