NYSE:AWK

Stock Analysis Report

American Water Works Company

Executive Summary

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States.


Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has American Water Works Company's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AWK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

16.3%

AWK

6.6%

US Water Utilities

9.4%

US Market


1 Year Return

26.5%

AWK

16.1%

US Water Utilities

-6.8%

US Market

Return vs Industry: AWK exceeded the US Water Utilities industry which returned 16.1% over the past year.

Return vs Market: AWK exceeded the US Market which returned -6.8% over the past year.


Shareholder returns

AWKIndustryMarket
7 Day16.3%6.6%9.4%
30 Day1.6%-6.6%-3.9%
90 Day7.5%-2.1%-16.5%
1 Year28.6%26.5%18.1%16.1%-4.8%-6.8%
3 Year77.6%67.7%57.3%48.3%23.4%15.2%
5 Year172.2%145.8%126.1%103.1%41.3%25.7%

Price Volatility Vs. Market

How volatile is American Water Works Company's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Water Works Company undervalued compared to its fair value and its price relative to the market?

38.4x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AWK ($131.75) is trading above our estimate of fair value ($55.04)

Significantly Below Fair Value: AWK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AWK is poor value based on its PE Ratio (38.4x) compared to the Water Utilities industry average (36.5x).

PE vs Market: AWK is poor value based on its PE Ratio (38.4x) compared to the US market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: AWK is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: AWK is overvalued based on its PB Ratio (3.9x) compared to the US Water Utilities industry average (2.6x).


Next Steps

Future Growth

How is American Water Works Company forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AWK's forecast earnings growth (9.1% per year) is above the savings rate (1.7%).

Earnings vs Market: AWK's earnings (9.1% per year) are forecast to grow slower than the US market (11.4% per year).

High Growth Earnings: AWK's earnings are forecast to grow, but not significantly.

Revenue vs Market: AWK's revenue (4.8% per year) is forecast to grow slower than the US market (6.9% per year).

High Growth Revenue: AWK's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AWK's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has American Water Works Company performed over the past 5 years?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AWK has high quality earnings.

Growing Profit Margin: AWK's current net profit margins (17.2%) are higher than last year (16.5%).


Past Earnings Growth Analysis

Earnings Trend: AWK's earnings have grown by 5.9% per year over the past 5 years.

Accelerating Growth: AWK's earnings growth over the past year (9.5%) exceeds its 5-year average (5.9% per year).

Earnings vs Industry: AWK earnings growth over the past year (9.5%) exceeded the Water Utilities industry 4.5%.


Return on Equity

High ROE: AWK's Return on Equity (10.1%) is considered low.


Next Steps

Financial Health

How is American Water Works Company's financial position?


Financial Position Analysis

Short Term Liabilities: AWK's short term assets ($1.3B) do not cover its short term liabilities ($2.0B).

Long Term Liabilities: AWK's short term assets ($1.3B) do not cover its long term liabilities ($14.5B).


Debt to Equity History and Analysis

Debt Level: AWK's debt to equity ratio (154.5%) is considered high.

Reducing Debt: AWK's debt to equity ratio has increased from 121.1% to 154.5% over the past 5 years.

Debt Coverage: AWK's debt is not well covered by operating cash flow (14.6%).

Interest Coverage: AWK's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet


Next Steps

Dividend

What is American Water Works Company's current dividend yield, its reliability and sustainability?

1.52%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AWK's dividend (1.52%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.87%).

High Dividend: AWK's dividend (1.52%) is low compared to the top 25% of dividend payers in the US market (5.12%).


Stability and Growth of Payments

Stable Dividend: AWK's dividends per share have been stable in the past 10 years.

Growing Dividend: AWK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57%), AWK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AWK's dividends in 3 years are forecast to be covered by earnings (56.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average management tenure


CEO

Walter Lynch (56yo)

no data

Tenure

US$3,023,155

Compensation

Mr. Walter J. Lynch has been the President and Chief Executive Officer at American Water Works Company, Inc. since April 1, 2020. Mr. Lynch had been an Executive Vice President at American Water Works Comp ...


CEO Compensation Analysis

Compensation vs Market: Walter's total compensation ($USD3.02M) is below average for companies of similar size in the US market ($USD11.76M).

Compensation vs Earnings: Walter's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Walter Lynch
Presidentno dataUS$3.02m0.066% $15.7m
M. Hardwick
Executive VP & CFO0.75yrUS$1.34m0.00015% $35.8k
Michael Sgro
Executive VP5.17yrsUS$3.09m0.0040% $965.9k
Loyd Warnock
Senior VP0.25yrUS$1.27m0.0035% $830.0k
Melissa Wikle
VP, Controller & Principal Accounting Officer3.67yrsno data0.0021% $498.5k
Mark Smith
Chief Information Officer & VP7.58yrsno datano data
Edward Vallejo
Vice President of Investor Relations3.58yrsno datano data
Maureen Duffy
Senior Vice Presidentno datano datano data
Melanie Kennedy
Senior Vice President of Human Resources3.08yrsno data0.0041% $985.0k
Nick Rowe
Senior Vice President11.25yrsno datano data

3.6yrs

Average Tenure

57.5yo

Average Age

Experienced Management: AWK's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Walter Lynch
Presidentno dataUS$3.02m0.066% $15.7m
Patricia Kampling
Independent Director0.75yrUS$150.62kno data
George MacKenzie
Independent Director16.67yrsUS$259.24k0.013% $3.2m
Julia Johnson
Independent Director11.67yrsUS$259.24k0.0085% $2.0m
Martha Goss
Independent Director16.5yrsUS$264.24k0.015% $3.6m
Veronica Hagen
Independent Director4.17yrsUS$255.01k0.00018% $42.9k
Karl Kurz
Independent Non-Executive Chairman1.92yrsUS$366.32k0.0037% $894.4k
Jeffrey Edwards
Independent director2.08yrsUS$239.24k0.00098% $233.7k
Kimberly Harris
Independent Director0.75yrUS$150.62kno data
James Stavridis
Independent Director2.08yrsUS$239.24k0.00097% $231.3k

2.1yrs

Average Tenure

58yo

Average Age

Experienced Board: AWK's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AWK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

American Water Works Company, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Water Works Company, Inc.
  • Ticker: AWK
  • Exchange: NYSE
  • Founded: 1886
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: US$23.849b
  • Shares outstanding: 181.02m
  • Website: https://www.amwater.com

Number of Employees


Location

  • American Water Works Company, Inc.
  • 1 Water Street
  • Camden
  • New Jersey
  • 08102-1658
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AWKNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2008
AWCDB (Deutsche Boerse AG)YesCommon StockDEEURApr 2008
AWCXTRA (XETRA Trading Platform)YesCommon StockDEEURApr 2008
AWKWBAG (Wiener Boerse AG)YesCommon StockATEURApr 2008
0HEWLSE (London Stock Exchange)YesCommon StockGBUSDApr 2008
AWCBRSE (Berne Stock Exchange)YesCommon StockCHCHFApr 2008
AWK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2008
A1WK34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

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 16 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, such as 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 various warranty protection programs to residential customers; and water and wastewater services on various military installations. In addition, the company undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. It operates approximately 80 surface water treatment plants; 520 groundwater treatment plants; 140 wastewater treatment plants; 52,500 miles of transmission, distribution, and collection mains and pipes; 1,000 groundwater wells; 1,500 water and wastewater pumping stations; 1,300 treated water storage facilities; and 76 dams. The company serves approximately 15 million people with drinking water, wastewater, and other water-related services in 46 states. The company was founded in 1886 and is headquartered in Camden, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 07:27
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.