Last Updated: 19 Sep 2024
Executive Summary
American Water Works (AWK) is a leading water utility company with a market capitalization of $29 billion. The company has been operating for over 130 years and provides water and wastewater services to approximately 15 million people in the United States and Canada. AWK has a strong financial profile, with a stable revenue base and solid cash flow. The company's earnings have grown at a steady pace in recent years, and it has a history of paying dividends to shareholders.
Company Overview
American Water Works is the largest publicly traded water and wastewater utility company in the United States. The company has a diverse portfolio of regulated and unregulated businesses, including water distribution, wastewater treatment, and water infrastructure construction. AWK operates in 47 states and Canada, and it serves approximately 15 million people.
The company's regulated businesses are subject to rate regulation by state and federal agencies. This provides AWK with a stable revenue base and predictable earnings. The company's unregulated businesses are not subject to rate regulation, and they provide AWK with opportunities for growth.
Fundamental Analysis
AWK has a strong financial profile. The company's revenue has grown at a steady pace in recent years, and it has a history of paying dividends to shareholders. The company's earnings per share (EPS) have grown from $4.36 in 2019 to $4.90 in 2023. AWK's dividend per share has also grown in recent years, from $2.64 in 2019 to $2.888 in 2023.
The company's balance sheet is also strong. AWK has a low level of debt and a high level of cash and equivalents. The company's debt-to-equity ratio is 0.43, which is below the industry average. AWK's cash and equivalents balance is $1.5 billion, which is sufficient to cover its short-term obligations.
Technical Analysis
AWK's stock price has been trading in a range between $111.7 and $150.68 over the past 52 weeks. The stock price is currently trading at $148.94, which is near the top of its 52-week range.
The stock's technical indicators are mixed. The relative strength index (RSI) is above 70, which indicates that the stock is overbought. The moving average convergence divergence (MACD) is also above zero, which indicates that the stock is in a bullish trend.
Short Term Outlook
The short-term outlook for AWK is positive. The company's earnings are expected to continue to grow in the coming quarters, and the stock price is expected to rise. The stock's technical indicators are also positive, which suggests that the stock is in a bullish trend.
Long Term Outlook
The long-term outlook for AWK is also positive. The company is well-positioned to benefit from the growing demand for water and wastewater services. The company's regulated businesses provide it with a stable revenue base, and its unregulated businesses provide it with opportunities for growth.
Analyst Recommendations
The majority of analysts have a buy rating on AWK. The average analyst target price is $144.99, which is below the current stock price. However, the analysts believe that AWK is a good long-term investment.
