AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AWK - US0304201033 - Common Stock
131.55 USD
+1.46 (+1.12%)
131.55 USD
0 (0%)
AWK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 15 industry peers in the Water Utilities industry. While AWK has a great profitability rating, there are quite some concerns on its financial health. AWK is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AWK was profitable.
AWK had a positive operating cash flow in the past year.
Each year in the past 5 years AWK has been profitable.
AWK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AWK's Return On Assets of 3.20% is fine compared to the rest of the industry. AWK outperforms 66.67% of its industry peers.
AWK has a better Return On Equity (10.20%) than 86.67% of its industry peers.
AWK's Return On Invested Capital of 4.57% is fine compared to the rest of the industry. AWK outperforms 80.00% 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 4.77%.
The last Return On Invested Capital (4.57%) for AWK 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
AWK has a Profit Margin of 21.93%. This is in the better half of the industry: AWK outperforms 66.67% of its industry peers.
AWK's Profit Margin has improved in the last couple of years.
AWK has a Operating Margin of 36.96%. This is amongst the best in the industry. AWK outperforms 86.67% of its industry peers.
In the last couple of years the Operating Margin of AWK 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AWK is destroying value.
Compared to 1 year ago, AWK has about the same amount of shares outstanding.
Compared to 5 years ago, AWK has more shares outstanding
AWK has a worse debt/assets ratio than last year.
2.2 Solvency
AWK has an Altman-Z score of 1.00. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AWK (1.00) is comparable to the rest of the industry.
AWK 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, AWK is doing worse than 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.62
WACC7.32%
2.3 Liquidity
A Current Ratio of 0.42 indicates that AWK may have some problems paying its short term obligations.
The Current ratio of AWK (0.42) is worse than 86.67% of its industry peers.
A Quick Ratio of 0.39 indicates that AWK may have some problems paying its short term obligations.
The Quick ratio of AWK (0.39) is worse than 86.67% 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, AWK shows a small growth in Earnings Per Share. The EPS has been growing by 7.98% on average per year.
The Revenue has grown by 12.29% in the past year. This is quite good.
Measured over the past years, AWK 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
AWK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.48% yearly.
The Revenue is expected to grow by 7.90% on average over the next years.
EPS Next Y9.26%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
EPS Next 5Y7.48%
Revenue Next Year10.7%
Revenue Next 2Y8.73%
Revenue Next 3Y8.1%
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.
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
The Price/Earnings ratio is 23.32, which indicates a rather expensive current valuation of AWK.
The rest of the industry has a similar Price/Earnings ratio as AWK.
The average S&P500 Price/Earnings ratio is at 26.54. AWK is around the same levels.
The Price/Forward Earnings ratio is 21.36, which indicates a rather expensive current valuation of AWK.
The rest of the industry has a similar Price/Forward Earnings ratio as AWK.
When comparing the Price/Forward Earnings ratio of AWK to the average of the S&P500 Index (23.78), we can say AWK is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.32 | ||
| Fwd PE | 21.36 |
4.2 Price Multiples
AWK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AWK is cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AWK does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of AWK may justify a higher PE ratio.
PEG (NY)2.52
PEG (5Y)2.92
EPS Next 2Y7.8%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.57%. Purely for dividend investing, there may be better candidates out there.
AWK's Dividend Yield is slightly below the industry average, which is at 3.47.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
5.2 History
On average, the dividend of AWK grows each year by 9.01%, which is quite nice.
AWK has been paying a dividend for at least 10 years, so it has a reliable track record.
AWK has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.01%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
55.85% of the earnings are spent on dividend by AWK. This is a bit on the high side, but may be sustainable.
The dividend of AWK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.85%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
131.55
+1.46 (+1.12%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners98.56%
Inst Owner Change4.89%
Ins Owners0.08%
Ins Owner Change0.3%
Market Cap25.67B
Revenue(TTM)5.07B
Net Income(TTM)1.11B
Analysts67.37
Price Target144.48 (9.83%)
Short Float %3.85%
Short Ratio4.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.85%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.43%
Min EPS beat(2)-3.16%
Max EPS beat(2)2.31%
EPS beat(4)2
Avg EPS beat(4)0.41%
Min EPS beat(4)-3.67%
Max EPS beat(4)6.16%
EPS beat(8)3
Avg EPS beat(8)-0.48%
EPS beat(12)5
Avg EPS beat(12)0.14%
EPS beat(16)8
Avg EPS beat(16)-0.52%
Revenue beat(2)2
Avg Revenue beat(2)5.06%
Min Revenue beat(2)3.82%
Max Revenue beat(2)6.3%
Revenue beat(4)4
Avg Revenue beat(4)5.77%
Min Revenue beat(4)3.82%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)4.18%
Revenue beat(12)11
Avg Revenue beat(12)3.8%
Revenue beat(16)12
Avg Revenue beat(16)1.68%
PT rev (1m)-0.52%
PT rev (3m)0.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.21%
EPS NY rev (1m)0.27%
EPS NY rev (3m)0.36%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.33%
Revenue NY rev (1m)0.91%
Revenue NY rev (3m)1.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.32 | ||
| Fwd PE | 21.36 | ||
| P/S | 5.06 | ||
| P/FCF | N/A | ||
| P/OCF | 12.61 | ||
| P/B | 2.35 | ||
| P/tB | 2.63 | ||
| EV/EBITDA | 14.4 |
EPS(TTM)5.64
EY4.29%
EPS(NY)6.16
Fwd EY4.68%
FCF(TTM)-4.8
FCFYN/A
OCF(TTM)10.43
OCFY7.93%
SpS25.98
BVpS55.9
TBVpS50
PEG (NY)2.52
PEG (5Y)2.92
Graham Number84.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.2% | ||
| ROCE | 6.03% | ||
| ROIC | 4.57% | ||
| ROICexc | 4.59% | ||
| ROICexgc | 4.76% | ||
| OM | 36.96% | ||
| PM (TTM) | 21.93% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)3.09%
ROA(5y)3.39%
ROE(3y)10.16%
ROE(5y)11.75%
ROIC(3y)4.11%
ROIC(5y)4.07%
ROICexc(3y)4.14%
ROICexc(5y)4.11%
ROICexgc(3y)4.32%
ROICexgc(5y)4.32%
ROCE(3y)5.41%
ROCE(5y)5.39%
ROICexgc growth 3Y4.46%
ROICexgc growth 5Y-0.91%
ROICexc growth 3Y4.79%
ROICexc growth 5Y-0.15%
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
F-Score7
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.11 | ||
| Cap/Depr | 341.61% | ||
| Cap/Sales | 58.62% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.16% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.39 | ||
| Altman-Z | 1 |
F-Score7
WACC7.32%
ROIC/WACC0.62
Cap/Depr(3y)360.71%
Cap/Depr(5y)332.23%
Cap/Sales(3y)60.79%
Cap/Sales(5y)55.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.35%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.6%
EPS Next Y9.26%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
EPS Next 5Y7.48%
Revenue 1Y (TTM)12.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%9.67%
Revenue Next Year10.7%
Revenue Next 2Y8.73%
Revenue Next 3Y8.1%
Revenue Next 5Y7.9%
EBIT growth 1Y15.89%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year68.74%
EBIT Next 3Y30.3%
EBIT Next 5Y18.89%
FCF growth 1Y-18.91%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y20.34%
OCF growth 3Y12.38%
OCF growth 5Y8.14%
AMERICAN WATER WORKS CO INC / AWK FAQ
Can you provide the ChartMill fundamental rating for AMERICAN WATER WORKS CO INC?
ChartMill assigns a fundamental rating of 4 / 10 to AWK.
What is the valuation status for AWK stock?
ChartMill assigns a valuation rating of 2 / 10 to AMERICAN WATER WORKS CO INC (AWK). This can be considered as Overvalued.
What is the profitability of AWK stock?
AMERICAN WATER WORKS CO INC (AWK) has a profitability rating of 7 / 10.
What is the earnings growth outlook for AMERICAN WATER WORKS CO INC?
The Earnings per Share (EPS) of AMERICAN WATER WORKS CO INC (AWK) is expected to grow by 9.26% in the next year.
Is the dividend of AMERICAN WATER WORKS CO INC sustainable?
The dividend rating of AMERICAN WATER WORKS CO INC (AWK) is 5 / 10 and the dividend payout ratio is 55.85%.