AMERICAN WATER WORKS CO INC (AWK)
US0304201033 - Common Stock
Overall AWK gets a fundamental rating of 4 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 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.
In the past year AWK had a positive cash flow from operations.
AWK had positive earnings in each of the past 5 years.
AWK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AWK has a Return On Assets (3.09%) which is in line with its industry peers.
With a Return On Equity value of 9.49%, AWK perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.34%, AWK is doing good in the industry, outperforming 78.57% of the companies in the same industry.
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 5.01%.
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 of 21.77%. This is in the better half of the industry: AWK outperforms 64.29% of its industry peers.
In the last couple of years the Profit Margin of AWK has grown nicely.
The Operating Margin of AWK (35.81%) is better than 92.86% 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
AWK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AWK has been increased compared to 1 year ago.
The number of shares outstanding for AWK has been increased compared to 5 years ago.
AWK has a better debt/assets ratio than last year.
2.2 Solvency
AWK has an Altman-Z score of 1.10. 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 (1.10) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.23 is on the high side and indicates that AWK has dependencies on debt 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 | 1.1 |
ROIC/WACC0.62
WACC6.96%
2.3 Liquidity
A Current Ratio of 0.58 indicates that AWK may have some problems paying its short term obligations.
AWK's Current ratio of 0.58 is on the low side compared to the rest of the industry. AWK is outperformed by 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 has a Quick ratio of 0.53. This is amonst the worse of the industry: AWK underperforms 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 4.12% over the past year.
AWK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.77% yearly.
AWK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.24%.
AWK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.24% yearly.
EPS 1Y (TTM)4.12%
EPS 3Y8.92%
EPS 5Y8.77%
EPS Q2Q%3.45%
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 Y5.47%
EPS Next 2Y6.78%
EPS Next 3Y7.11%
EPS Next 5Y7.05%
Revenue Next Year7.77%
Revenue Next 2Y6.92%
Revenue Next 3Y7.2%
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
Based on the Price/Earnings ratio of 26.45, the valuation of AWK can be described as expensive.
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 (28.93), we can say AWK is valued inline with the index average.
With a Price/Forward Earnings ratio of 23.25, AWK is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AWK is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of AWK to the average of the S&P500 Index (24.02), we can say AWK is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.45 | ||
| Fwd PE | 23.25 |
4.2 Price Multiples
AWK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AWK is cheaper than 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.41 |
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.
AWK has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.84
PEG (5Y)3.02
EPS Next 2Y6.78%
EPS Next 3Y7.11%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.23%, AWK has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.39, AWK has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.24, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
5.2 History
On average, the dividend of AWK grows each year by 9.71%, which is quite nice.
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
58.29% 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.
DP58.29%
EPS Next 2Y6.78%
EPS Next 3Y7.11%
AMERICAN WATER WORKS CO INC
NYSE:AWK (11/7/2024, 3:19:57 PM)
133.59
+0.01 (+0.01%)
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 Cap26.04B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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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)
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Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.45 | ||
| Fwd PE | 23.25 | ||
| 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)4.84
PEG (5Y)3.02
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)4.12%
EPS 3Y8.92%
EPS 5Y
EPS Q2Q%
EPS Next Y5.47%
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