AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AWK - US0304201033 - Common Stock
130.74 USD
+1.03 (+0.79%)
130.74 USD
0 (0%)
AWK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 14 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 valied quite expensively at the moment, while 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.
- In the past 5 years AWK has always been profitable.
- AWK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AWK has a Return On Assets of 3.20%. This is in the better half of the industry: AWK outperforms 64.29% of its industry peers.
- AWK has a Return On Equity of 10.20%. This is amongst the best in the industry. AWK outperforms 85.71% of its industry peers.
- AWK has a better Return On Invested Capital (4.57%) 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 4.99%.
- 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's Profit Margin of 21.93% is fine compared to the rest 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.
- Looking at the Operating Margin, with a value of 36.96%, AWK belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
- AWK'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
- AWK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 0.99. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
- AWK's Altman-Z score of 0.99 is in line compared to the rest of the industry. AWK outperforms 50.00% of its industry peers.
- AWK has a Debt/Equity ratio of 1.29. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of AWK (1.29) is worse than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.99 |
ROIC/WACC0.59
WACC7.68%
2.3 Liquidity
- A Current Ratio of 0.42 indicates that AWK may have some problems paying its short term obligations.
- With a Current ratio value of 0.42, AWK is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
- AWK has a Quick Ratio of 0.42. 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 0.39 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 | 0.42 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
- AWK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.35%, which is quite good.
- AWK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.98% yearly.
- 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 7.50% yearly.
- AWK 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.
- 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 23.18, which indicates a rather expensive current valuation of AWK.
- AWK's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, AWK is valued at the same level.
- The Price/Forward Earnings ratio is 21.20, which indicates a rather expensive current valuation of AWK.
- AWK's Price/Forward Earnings ratio is in line with the industry average.
- AWK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.18 | ||
| Fwd PE | 21.2 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, AWK is valued a bit cheaper than 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.37 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of AWK may justify a higher PE ratio.
PEG (NY)2.51
PEG (5Y)2.9
EPS Next 2Y7.86%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
- AWK has a Yearly Dividend Yield of 2.52%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.93, AWK is paying slightly less dividend.
- AWK's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.52% |
5.2 History
- The dividend of AWK is nicely growing with an annual growth rate of 9.01%!
- AWK has paid a dividend for at least 10 years, which is 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
- AWK pays out 55.85% of its income as dividend. 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 2Y7.86%
EPS Next 3Y7.52%
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.
Can you provide the valuation status for AMERICAN WATER WORKS CO INC?
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 are the PE and PB ratios of AMERICAN WATER WORKS CO INC (AWK) stock?
The Price/Earnings (PE) ratio for AMERICAN WATER WORKS CO INC (AWK) is 23.18 and the Price/Book (PB) ratio is 2.34.
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%.