Sabesp

SBS

Market cap $24.4B

Sabesp remains a buy, as its potential Copasa acquisition could be a game-changing catalyst, enhancing its investment thesis. SBS's privatization has driven significant efficiency gains, cost reductions, and a record-high EV/EBITDA multiple, reflecting strong management execution. Acquiring a 30% stake in Copasa would add nearly 10% to SBS's EBITDA, with further upside from operational synergies and a possible 27% valuation re-rating.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) Analyst/Investor Day Transcript

This article is part of our monthly series where we highlight five large-cap, relatively safe, dividend-paying companies offering significant discounts to their historical norms. We go over our filtering process to select just five conservative DGI stocks from more than 7,500 companies that are traded on U.S. exchanges, including OTC networks. In addition to the primary list that yields 4.26%, we present two other groups of five DGI stocks each, from moderate to high yields of up to 8%.

Sabesp (SBS) could be a great choice for investors looking to make a profit from fundamentally strong stocks that are currently on the move. It is one of the several stocks that made it through our "Recent Price Strength" screen.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) Q4 2025 Earnings Call Transcript

Sabesp's bull case is driven by its post-privatization investment cycle, which is accelerating CapEx to expand water and sewage infrastructure across São Paulo. These investments flow directly into the Regulated Asset Base (RAB) which determines the company's allowed earnings under the regulatory model. With regulatory returns of roughly ~8% on the asset base, every expansion of the RAB translates into predictable earnings growth.

SABESP is a leading water utility in São Paulo, operating in a prosperous region with high water and sewage coverage. Recent growth is driven by service fee increases, higher large-user revenues, and a notable 4.4% rise in treated water production. SBS's potential acquisition of EMAE could enhance vertical integration, water security, and energy efficiency, pending regulatory approval.

Sabesp (SBS) could be a great choice for investors looking to make a profit from fundamentally strong stocks that are currently on the move. It is one of the several stocks that made it through our "Recent Price Strength" screen.

Nvidia earnings have cast a light on defensive areas, inducing a sector rotation that may accelerate in the short term. Looking beyond NVDA earnings, an economic environment characterized by slowing growth, persistent inflation, and tariff uncertainty is compelling investors to look beyond overbought tech. This shift favors sectors that offer resilience, stable cash flow, and intrinsic value over speculative future growth.

Companhia de Saneamento Básico do Estado de São Paulo - SABESP ( SBS ) Q3 2025 Earnings Call November 11, 2025 8:00 AM EST Company Participants Daniel Szlak - CFO, Investor Relations Officer & Member of Executive Board Carlos Leone Piani - CEO & Member of Executive Board Conference Call Participants Guilherme Bosso - Goldman Sachs Group, Inc., Research Division Filipe Andrade - Itaú Corretora de Valores S.A., Research Division João Pimentel - Citigroup Inc., Research Division Daniel Travitzky - J.