(VIANEWS) – The NYSE opens in less than four hours and American Water Works‘s pre-market value is already 4.59% down.
American Water Works’s last close was $151.26, 20.24% under its 52-week high of $189.65.
The last session, NYSE ended with American Water Works (AWK) jumping 2.05% to $151.26. NYSE rose 0.41% to $15,545.52, after two consecutive sessions in a row of gains, on what was a somewhat up trend trading session.
Is American Water Works Stock a Good Investment?
Whether or not you should invest in American Water Works (AWK) stock depends on how much risk you are willing to take. American Water Works is one of the largest publicly traded water utility companies in the United States. It serves 15 million customers in 46 states. Its business model involves acquiring water systems from towns and selling upgraded water systems to consumers. It also provides pipeline construction and equipment hauling services. Its market-based businesses are expected to drive performance over the long run.
American Water Works is an attractive business to invest in because of the company’s long-term growth prospects. This is especially true considering the company’s ability to contain expenses. The company has a stable and steady share count of 182 million.
American Water Works’ operating revenue dropped 5.2% in the first quarter of this year. The reason for this decline is a legitimate one. The company sold its Homeowner Services Group business in December. It expects to use the $480 million in cash from the sale to fund capital investments in the near future. It also expects to pass the cost of these upgrades to customers through rate increases.
The company’s guidance for weather-normalized EPS compound annual growth of 7% to 9% is quite robust for a water utility. Management has also guided for annual dividend growth of 7% to 9%.
As an investor, you need to make sure that the company’s fundamentals are solid. The company’s price-to-earnings ratio is 44 times compared to the five-year average of 35 times. American Water Works’ non-GAAP net margin rose to 18.8% in the first quarter of this year.
About American Water Works
American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. It also provides water and wastewater services on various military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. In addition, the company operates approximately 80 surface water treatment plants; 480 groundwater treatment plants; 160 wastewater treatment plants; 52,500 miles of transmission, distribution, and collection mains and pipes; 1,100 groundwater wells; 1,700 water and wastewater pumping stations; 1,300 treated water storage facilities; and 76 dams. It serves approximately 14 million people with drinking water, wastewater, and other related services in 24 states. American Water Works Company, Inc. was founded in 1886 and is headquartered in Camden, New Jersey.
Earnings per Share
American Water Works’ trailing 12 month EPS is $3.96.
American Water Works’ trailing 12 months earnings to price ratio is 38.22. The purchaser of the shares is investing $38.22 per dollar in annual earnings.
For the 12 trailing months, the company’s return-on-equity, which is a measure of the business’ profitability relative to shareholders’ equity, was 18.22%.
Morningstar, Inc. has stated that the next dividend payment will be on August 7, 2022. The forward dividend rate for the year is estimated at 2.62, and the forward dividend yield to be 1.69%.
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