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American Water Works Co Inc AWK

Morningstar Rating
$119.68 +1.14 (0.96%)
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Company Report

American Water Earnings: Shares Attractive as Management Continues Strong Execution

We are reaffirming our $142 per share fair value estimate after American Water reported full-year operating earnings of $4.90 per share, compared with $4.51 in 2022. Management increased its 2024 earnings guidance to $5.20 to $5.30 per share, up from $5.10 to $5.20, to account for higher interest income on its HOS business sale. Incorporating the gain will not have an material impact on our fair value estimate.

Price vs Fair Value

AWK is trading at a 16% discount.
Price
$119.68
Fair Value
$362.00
Uncertainty
Low
1-Star Price
$475.20
5-Star Price
$962.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The company operates in constructive regulatory environments that support recovery of prudent costs and support growth investments.

Bears

American Water Works' sizable plans for infrastructure replacement and upgrades could run into some pushback from rising rates for water that has traditionally been cheap.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$118.54
Day Range
$116.85120.37
52-Week Range
$114.25153.43
Bid/Ask
$119.09 / $119.76
Market Cap
$23.31 Bil
Volume/Avg
1.8 Mil / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
25.09
Price/Sales
5.46
Dividend Yield (Trailing)
2.36%
Dividend Yield (Forward)
2.36%
Total Yield
2.36%

Company Profile

American Water Works is the largest investor-owned U.S. water and wastewater utility, serving approximately 3.5 million customers in 16 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets. The company's nonregulated business is water services for military bases, which operates under long-term contracts with regulated-like returns.
Sector
Utilities
Industry
Utilities - Regulated Water
Stock Style Box
Mid Core
Total Number of Employees
6,500

Competitors

Valuation

Metric
AWK
WEC
WTRG
Price/Earnings (Normalized)
25.0916.9319.37
Price/Book Value
2.382.111.62
Price/Sales
5.462.784.54
Price/Cash Flow
12.858.8912.31
Price/Earnings
AWK
WEC
WTRG

Financial Strength

Metric
AWK
WEC
WTRG
Quick Ratio
0.490.300.31
Current Ratio
0.650.550.62
Interest Coverage
3.443.112.51
Quick Ratio
AWK
WEC
WTRG

Profitability

Metric
AWK
WEC
WTRG
Return on Assets (Normalized)
3.24%3.40%3.05%
Return on Equity (Normalized)
10.12%12.56%8.71%
Return on Invested Capital (Normalized)
5.82%6.97%5.70%
Return on Assets
AWK
WEC
WTRG
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Utilities - Regulated Water Industry Comparables

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