AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
NYSE:AWK - New York Stock Exchange, Inc. - US0304201033 - Common Stock - Currency: USD
Overall AWK gets a fundamental rating of 3 out of 10. We evaluated AWK against 14 industry peers in the Water Utilities industry. AWK has a medium profitability rating, but doesn't score so well on its financial health evaluation. AWK has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year AWK was profitable.
In the past year AWK had a positive cash flow from operations.
AWK had positive earnings in 4 of the past 5 years.
AWK had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of AWK (3.09%) is comparable to the rest of the industry.
The Return On Equity of AWK (9.49%) is comparable to the rest of the industry.
AWK's Return On Invested Capital of 4.34% is fine compared to the rest of the industry. AWK outperforms 71.43% of its industry peers.
AWK had an Average Return On Invested Capital over the past 3 years of 4.02%. This 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
The Profit Margin of AWK (21.77%) is comparable to the rest of the industry.
AWK's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 35.81%, AWK is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
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
AWK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for AWK. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
AWK has an Altman-Z score of 1.07. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
AWK has a Altman-Z score (1.07) which is in line with its industry peers.
AWK has a Debt/Equity ratio of 1.23. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AWK (1.23) is worse than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.07 |
ROIC/WACC0.57
WACC7.58%
2.3 Liquidity
A Current Ratio of 0.58 indicates that AWK may have some problems paying its short term obligations.
The Current ratio of AWK (0.58) is worse than 85.71% of its industry peers.
A Quick Ratio of 0.53 indicates that AWK may have some problems paying its short term obligations.
AWK has a worse Quick ratio (0.53) than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
AWK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.56%.
Measured over the past years, AWK shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.06% on average per year.
EPS 1Y (TTM)5.56%
EPS 3Y10.06%
EPS 5Y8.06%
EPS Q2Q%32.61%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%16.38%
3.2 Future
Based on estimates for the next years, AWK will show a small growth in Earnings Per Share. The EPS will grow by 7.15% on average per year.
Based on estimates for the next years, AWK will show a small growth in Revenue. The Revenue will grow by 7.07% on average per year.
EPS Next Y8.46%
EPS Next 2Y8.08%
EPS Next 3Y6.94%
EPS Next 5Y7.15%
Revenue Next Year6.08%
Revenue Next 2Y6.44%
Revenue Next 3Y7.37%
Revenue Next 5Y7.07%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.94, the valuation of AWK can be described as rather expensive.
AWK's Price/Earnings ratio is a bit more expensive when compared to the industry. AWK is more expensive than 64.29% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. AWK is around the same levels.
AWK is valuated rather expensively with a Price/Forward Earnings ratio of 22.99.
AWK's Price/Forward Earnings is on the same level as the industry average.
AWK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.94 | ||
| Fwd PE | 22.99 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AWK is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.01 |
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.
PEG (NY)2.95
PEG (5Y)3.09
EPS Next 2Y8.08%
EPS Next 3Y6.94%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.38%. Purely for dividend investing, there may be better candidates out there.
AWK's Dividend Yield is slightly below the industry average, which is at 3.43.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
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 Years11
Div Non Decr Years11
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 2Y8.08%
EPS Next 3Y6.94%
132.68
+4.01 (+3.12%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.6%
Inst Owner Change1.24%
Ins Owners0.1%
Ins Owner Change-1.51%
Market Cap25.86B
Analysts69
Price Target138.04 (4.04%)
Short Float %2.48%
Short Ratio4.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Yearly Dividend2.82
Dividend Growth(5Y)9.71%
DP58.29%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.72%
Min EPS beat(2)-4.73%
Max EPS beat(2)-4.7%
EPS beat(4)1
Avg EPS beat(4)-1.38%
Min EPS beat(4)-5.83%
Max EPS beat(4)9.75%
EPS beat(8)3
Avg EPS beat(8)0.01%
EPS beat(12)6
Avg EPS beat(12)-0.82%
EPS beat(16)7
Avg EPS beat(16)-0.55%
Revenue beat(2)2
Avg Revenue beat(2)4.11%
Min Revenue beat(2)2.04%
Max Revenue beat(2)6.18%
Revenue beat(4)4
Avg Revenue beat(4)2.59%
Min Revenue beat(4)0.19%
Max Revenue beat(4)6.18%
Revenue beat(8)7
Avg Revenue beat(8)2.81%
Revenue beat(12)8
Avg Revenue beat(12)0.32%
Revenue beat(16)9
Avg Revenue beat(16)-0.74%
PT rev (1m)-3.19%
PT rev (3m)-3.72%
EPS NQ rev (1m)0.82%
EPS NQ rev (3m)0.82%
EPS NY rev (1m)0.19%
EPS NY rev (3m)0.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.94 | ||
| Fwd PE | 22.99 | ||
| P/S | 5.73 | ||
| P/FCF | N/A | ||
| P/OCF | 13.38 | ||
| P/B | 2.5 | ||
| P/tB | 2.8 | ||
| EV/EBITDA | 16.01 |
EPS(TTM)5.32
EY4.01%
EPS(NY)5.77
Fwd EY4.35%
FCF(TTM)-4.23
FCFYN/A
OCF(TTM)9.92
OCFY7.48%
SpS23.17
BVpS53.17
TBVpS47.3
PEG (NY)2.95
PEG (5Y)3.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.09% | ||
| ROE | 9.49% | ||
| ROCE | 5.45% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.36% | ||
| ROICexgc | 4.53% | ||
| OM | 35.81% | ||
| PM (TTM) | 21.77% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)3.64%
ROA(5y)3.3%
ROE(3y)12.53%
ROE(5y)11.75%
ROIC(3y)4.02%
ROIC(5y)4.18%
ROICexc(3y)4.05%
ROICexc(5y)4.22%
ROICexgc(3y)4.23%
ROICexgc(5y)4.48%
ROCE(3y)5.15%
ROCE(5y)5.4%
ROICexcg growth 3Y-2.05%
ROICexcg growth 5Y-2.08%
ROICexc growth 3Y-0.88%
ROICexc growth 5Y-1.2%
OM growth 3Y2.44%
OM growth 5Y1.42%
PM growth 3Y5.9%
PM growth 5Y6.23%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.37 | ||
| Cap/Depr | 361.94% | ||
| Cap/Sales | 61.09% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.25% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.58 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 1.07 |
F-Score5
WACC7.58%
ROIC/WACC0.57
Cap/Depr(3y)332.35%
Cap/Depr(5y)316.58%
Cap/Sales(3y)55.43%
Cap/Sales(5y)52.07%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)5.56%
EPS 3Y10.06%
EPS 5Y8.06%
EPS Q2Q%32.61%
EPS Next Y8.46%
EPS Next 2Y8.08%
EPS Next 3Y6.94%
EPS Next 5Y7.15%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%16.38%
Revenue Next Year6.08%
Revenue Next 2Y6.44%
Revenue Next 3Y7.37%
Revenue Next 5Y7.07%
EBIT growth 1Y10.3%
EBIT growth 3Y6.42%
EBIT growth 5Y5.72%
EBIT Next Year59.99%
EBIT Next 3Y25.1%
EBIT Next 5Y18.01%
FCF growth 1Y15.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y64.37%
OCF growth 3Y9.53%
OCF growth 5Y6.22%