AMERICAN WATER WORKS CO INC (AWC.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:AWC - US0304201033 - Common Stock
109.2 EUR
-1.1 (-1%)
We assign a fundamental rating of 5 out of 10 to AWC. AWC was compared to 4 industry peers in the Water Utilities industry. AWC scores excellent on profitability, but there are 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.
- Each year in the past 5 years AWC has been profitable.
- Each year in the past 5 years AWC had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.20%, AWC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 10.20%, AWC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 4.57%, AWC belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for AWC is in line with the industry average of 4.57%.
- The 3 year average ROIC (4.11%) for AWC is below the current ROIC(4.57%), indicating increased profibility in the last year.
| 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.
- AWC's Profit Margin has improved in the last couple of years.
- The Operating Margin of AWC (36.96%) is better than 100.00% of its industry peers.
- AWC's Operating Margin has improved in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AWC is destroying value.
- AWC has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, AWC has more shares outstanding
- AWC has a worse debt/assets ratio than last year.
2.2 Solvency
- AWC has an Altman-Z score of 1.00. This is a bad value and indicates that AWC is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.00, AWC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- A Debt/Equity ratio of 1.29 is on the high side and indicates that AWC has dependencies on debt financing.
- AWC has a better Debt to Equity ratio (1.29) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.6
WACC7.58%
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.
- With a decent Current ratio value of 0.42, AWC is doing good in the industry, outperforming 75.00% of the companies in the same industry.
- AWC has a Quick 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.
- The Quick ratio of AWC (0.39) is better than 75.00% of its industry peers.
| 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.
- Measured over the past 5 years, AWC shows a small growth in Earnings Per Share. The EPS has been growing by 7.98% on average per year.
- AWC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.29%.
- The Revenue has been growing slightly by 5.35% on average over the past years.
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.
- AWC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.90% yearly.
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
- Based on the Price/Earnings ratio of 22.89, the valuation of AWC can be described as rather expensive.
- AWC's Price/Earnings ratio is rather cheap when compared to the industry. AWC is cheaper than 100.00% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.87. AWC is valued slightly cheaper when compared to this.
- AWC is valuated rather expensively with a Price/Forward Earnings ratio of 20.96.
- Based on the Price/Forward Earnings ratio, AWC is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of AWC to the average of the S&P500 Index (25.96), we can say AWC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.89 | ||
| Fwd PE | 20.96 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AWC is valued cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.43 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AWC does not grow enough to justify the current Price/Earnings ratio.
- AWC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.48
PEG (5Y)2.87
EPS Next 2Y7.86%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
- AWC has a Yearly Dividend Yield of 2.52%. Purely for dividend investing, there may be better candidates out there.
- AWC's Dividend Yield is a higher than the industry average which is at 2.45.
- Compared to an average S&P500 Dividend Yield of 1.82, AWC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.52% |
5.2 History
- The dividend of AWC is nicely growing with an annual growth rate of 9.01%!
Dividend Growth(5Y)9.01%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- 55.85% of the earnings are spent on dividend by AWC. This is a bit on the high side, but may be sustainable.
- The dividend of AWC is growing, but the earnings are growing slower. 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 22.89 and the Price/Book (PB) ratio is 2.31.
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.