AMERICAN WATER WORKS CO INC (AWK)
US0304201033 - Common Stock
We assign a fundamental rating of 4 out of 10 to AWK. AWK was compared to 14 industry peers in the Water Utilities industry. There are concerns on the financial health of AWK while its profitability can be described as average. AWK is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AWK had positive earnings in the past year.
In the past year AWK had a positive cash flow from operations.
Each year in the past 5 years AWK has been profitable.
In the past 5 years AWK always reported a positive cash flow from operatings.
1.2 Ratios
AWK has a Return On Assets (3.09%) which is comparable to the rest of the industry.
With a decent Return On Equity value of 9.49%, AWK is doing good in the industry, outperforming 64.29% of the companies in the same industry.
The Return On Invested Capital of AWK (4.34%) is better than 71.43% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AWK is in line with the industry average of 5.70%.
The 3 year average ROIC (4.02%) for AWK is below the current ROIC(4.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.09% | ||
| ROE | 9.49% | ||
| ROIC | 4.34% |
ROA(3y)3.64%
ROA(5y)3.3%
ROE(3y)12.53%
ROE(5y)11.75%
ROIC(3y)4.02%
ROIC(5y)4.18%
1.3 Margins
AWK has a Profit Margin (21.77%) which is comparable to the rest of the industry.
AWK's Profit Margin has improved in the last couple of years.
AWK has a Operating Margin of 35.81%. This is in the better half of the industry: AWK outperforms 78.57% of its industry peers.
AWK's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 35.81% | ||
| PM (TTM) | 21.77% | ||
| GM | N/A |
OM growth 3Y2.44%
OM growth 5Y1.42%
PM growth 3Y5.9%
PM growth 5Y6.23%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AWK is destroying value.
AWK has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AWK has more shares outstanding
The debt/assets ratio for AWK has been reduced compared to a year ago.
2.2 Solvency
AWK has an Altman-Z score of 1.12. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.12, AWK perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
A Debt/Equity ratio of 1.23 is on the high side and indicates that AWK has dependencies on debt financing.
AWK's Debt to Equity ratio of 1.23 is on the low side compared to the rest of the industry. AWK is outperformed by 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.12 |
ROIC/WACC0.61
WACC7.09%
2.3 Liquidity
A Current Ratio of 0.58 indicates that AWK may have some problems paying its short term obligations.
AWK has a Current ratio of 0.58. This is amonst the worse of the industry: AWK underperforms 85.71% of its industry peers.
AWK has a Quick Ratio of 0.58. This is a bad value and indicates that AWK is not financially healthy enough and could expect problems in meeting its short term obligations.
AWK's Quick ratio of 0.53 is on the low side compared to the rest of the industry. AWK is outperformed by 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.51% over the past year.
The Earnings Per Share has been growing by 8.77% on average over the past years. This is quite good.
Looking at the last year, AWK shows a quite strong growth in Revenue. The Revenue has grown by 9.24% in the last year.
AWK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.24% yearly.
EPS 1Y (TTM)3.51%
EPS 3Y8.92%
EPS 5Y8.77%
EPS Q2Q%1.72%
Revenue 1Y (TTM)9.24%
Revenue growth 3Y3.88%
Revenue growth 5Y4.24%
Sales Q2Q%13.37%
3.2 Future
AWK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.05% yearly.
Based on estimates for the next years, AWK will show a small growth in Revenue. The Revenue will grow by 7.25% on average per year.
EPS Next Y5.54%
EPS Next 2Y6.87%
EPS Next 3Y7.14%
EPS Next 5Y7.05%
Revenue Next Year8.31%
Revenue Next 2Y7.24%
Revenue Next 3Y7.12%
Revenue Next 5Y7.25%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 27.47 indicates a quite expensive valuation of AWK.
AWK's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of AWK to the average of the S&P500 Index (28.65), we can say AWK is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 23.95, the valuation of AWK can be described as rather expensive.
AWK's Price/Forward Earnings is on the same level as the industry average.
AWK's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 23.95 |
4.2 Price Multiples
64.29% of the companies in the same industry are more expensive than AWK, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AWK has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.96
PEG (5Y)3.13
EPS Next 2Y6.87%
EPS Next 3Y7.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.32%, AWK has a reasonable but not impressive dividend return.
AWK's Dividend Yield is comparable with the industry average which is at 3.37.
Compared to an average S&P500 Dividend Yield of 2.23, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
5.2 History
The dividend of AWK is nicely growing with an annual growth rate of 9.71%!
AWK has paid a dividend for at least 10 years, which is a reliable track record.
AWK has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.71%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
AWK pays out 58.29% of its income as dividend. This is a bit on the high side, but may be sustainable.
AWK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP58.29%
EPS Next 2Y6.87%
EPS Next 3Y7.14%
AMERICAN WATER WORKS CO INC
NYSE:AWK (11/20/2024, 8:08:14 PM)
Premarket: 139.421 +1.53 (+1.11%)137.89
-0.31 (-0.22%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap26.87B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 23.95 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.96
PEG (5Y)3.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.09% | ||
| ROE | 9.49% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 35.81% | ||
| PM (TTM) | 21.77% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)3.51%
EPS 3Y8.92%
EPS 5Y
EPS Q2Q%
EPS Next Y5.54%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.24%
Revenue growth 3Y3.88%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y