AMERICAN WATER WORKS CO INC (AWC.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:AWC - US0304201033 - Common Stock
110.6 EUR
-1.4 (-1.25%)
Overall AWC gets a fundamental rating of 5 out of 10. We evaluated AWC against 4 industry peers in the Water Utilities industry. While AWC has a great profitability rating, there are quite some concerns on its financial health. AWC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- AWC had positive earnings in the past year.
- AWC had a positive operating cash flow in the past year.
- In the past 5 years AWC has always been profitable.
- Each year in the past 5 years AWC had a positive operating cash flow.
1.2 Ratios
- AWC has a better Return On Assets (3.20%) than 100.00% of its industry peers.
- With an excellent Return On Equity value of 10.20%, AWC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 4.57%, AWC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AWC is in line with the industry average of 4.57%.
- The last Return On Invested Capital (4.57%) for AWC is above the 3 year average (4.11%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.2% | ||
| ROIC | 4.57% |
ROA(3y)3.09%
ROA(5y)3.39%
ROE(3y)10.16%
ROE(5y)11.75%
ROIC(3y)4.11%
ROIC(5y)4.07%
1.3 Margins
- With an excellent Profit Margin value of 21.93%, AWC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of AWC has grown nicely.
- With an excellent Operating Margin value of 36.96%, AWC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of AWC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.96% | ||
| PM (TTM) | 21.93% | ||
| GM | N/A |
OM growth 3Y6.42%
OM growth 5Y1.75%
PM growth 3Y-11.29%
PM growth 5Y5.46%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- AWC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- AWC has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for AWC has been increased compared to 5 years ago.
- Compared to 1 year ago, AWC has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.00, we must say that AWC is in the distress zone and has some risk of bankruptcy.
- AWC has a Altman-Z score of 1.00. This is amongst the best in the industry. AWC outperforms 100.00% of its industry peers.
- AWC has a Debt/Equity ratio of 1.29. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.29, AWC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.6
WACC7.6%
2.3 Liquidity
- AWC has a Current Ratio of 0.42. This is a bad value and indicates that AWC is not financially healthy enough and could expect problems in meeting its short term obligations.
- AWC has a better Current ratio (0.42) than 75.00% of its industry peers.
- A Quick Ratio of 0.39 indicates that AWC may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.39, AWC is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.35% over the past year.
- The Earnings Per Share has been growing slightly by 7.98% on average over the past years.
- The Revenue has grown by 12.29% in the past year. This is quite good.
- Measured over the past years, AWC shows a small growth in Revenue. The Revenue has been growing by 5.35% on average per year.
EPS 1Y (TTM)12.35%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.6%
Revenue 1Y (TTM)12.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%9.67%
3.2 Future
- AWC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.50% yearly.
- Based on estimates for the next years, AWC will show a small growth in Revenue. The Revenue will grow by 7.90% on average per year.
EPS Next Y9.24%
EPS Next 2Y7.86%
EPS Next 3Y7.52%
EPS Next 5Y7.5%
Revenue Next Year10.35%
Revenue Next 2Y8.89%
Revenue Next 3Y8.24%
Revenue Next 5Y7.9%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 23.04, which indicates a rather expensive current valuation of AWC.
- 100.00% of the companies in the same industry are more expensive than AWC, based on the Price/Earnings ratio.
- AWC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 21.06, AWC is valued on the expensive side.
- Based on the Price/Forward Earnings ratio, AWC is valued cheaper than 100.00% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. AWC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.04 | ||
| Fwd PE | 21.06 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AWC is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.38 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of AWC may justify a higher PE ratio.
PEG (NY)2.49
PEG (5Y)2.89
EPS Next 2Y7.86%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.52%, AWC has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.45, AWC pays a bit more dividend than its industry peers.
- AWC's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.52% |
5.2 History
- On average, the dividend of AWC grows each year by 9.01%, which is quite nice.
Dividend Growth(5Y)9.01%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- AWC pays out 55.85% of its income as dividend. This is a bit on the high side, but may be sustainable.
- AWC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.85%
EPS Next 2Y7.86%
EPS Next 3Y7.52%
AMERICAN WATER WORKS CO INC / AWC.DE FAQ
What is the fundamental rating for AWC stock?
ChartMill assigns a fundamental rating of 5 / 10 to AWC.DE.
What is the valuation status for AWC stock?
ChartMill assigns a valuation rating of 4 / 10 to AMERICAN WATER WORKS CO INC (AWC.DE). This can be considered as Fairly Valued.
What is the profitability of AWC stock?
AMERICAN WATER WORKS CO INC (AWC.DE) has a profitability rating of 8 / 10.
What is the valuation of AMERICAN WATER WORKS CO INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for AMERICAN WATER WORKS CO INC (AWC.DE) is 23.04 and the Price/Book (PB) ratio is 2.32.
Can you provide the expected EPS growth for AWC stock?
The Earnings per Share (EPS) of AMERICAN WATER WORKS CO INC (AWC.DE) is expected to grow by 9.24% in the next year.