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. There are concerns on the financial health of AWK while its profitability can be described as average. AWK is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AWK had positive earnings in the past year.
AWK had a positive operating cash flow in the past year.
AWK had positive earnings in each of the past 5 years.
Each year in the past 5 years AWK had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.23%, AWK is in line with its industry, outperforming 57.14% of the companies in the same industry.
AWK has a better Return On Equity (10.17%) than 78.57% of its industry peers.
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.
Measured over the past 3 years, the Average Return On Invested Capital for AWK is in line with the industry average of 5.00%.
The 3 year average ROIC (4.11%) for AWK is below the current ROIC(4.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROIC | 4.34% |
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
Looking at the Profit Margin, with a value of 22.24%, AWK is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Profit Margin of AWK has grown nicely.
AWK's Operating Margin of 36.61% is fine compared to the rest of the industry. AWK outperforms 78.57% of its industry peers.
AWK's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| 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.
AWK has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, AWK has more shares outstanding
The debt/assets ratio for AWK is higher compared to a year ago.
2.2 Solvency
AWK has an Altman-Z score of 1.11. 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 (1.11) is comparable to the rest of the industry.
AWK has a Debt/Equity ratio of 1.36. This is a high value indicating a heavy dependency on external financing.
AWK's Debt to Equity ratio of 1.36 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 | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.11 |
ROIC/WACC0.54
WACC8%
2.3 Liquidity
A Current Ratio of 0.49 indicates that AWK may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.49, AWK is doing worse than 85.71% of the companies in the same industry.
AWK has a Quick Ratio of 0.49. This is a bad value and indicates that AWK is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.44, AWK is doing worse than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
AWK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.52%.
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 11.79% in the past year. This is quite good.
The Revenue has been growing slightly by 5.35% on average over the past years.
EPS 1Y (TTM)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
3.2 Future
The Earnings Per Share is expected to grow by 7.29% on average over the next years.
AWK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.26% yearly.
EPS Next Y9.01%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
EPS Next 5Y7.29%
Revenue Next Year9.11%
Revenue Next 2Y7.86%
Revenue Next 3Y8.03%
Revenue Next 5Y7.26%
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 26.13 indicates a quite expensive valuation of AWK.
Based on the Price/Earnings ratio, AWK is valued a bit more expensive than 64.29% of the companies in the same industry.
When comparing the Price/Earnings ratio of AWK to the average of the S&P500 Index (27.19), we can say AWK is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 22.85, the valuation of AWK can be described as rather expensive.
Based on the Price/Forward Earnings ratio, AWK is valued a bit more expensive than 64.29% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.33. AWK is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.13 | ||
| Fwd PE | 22.85 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AWK.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16 |
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)2.9
PEG (5Y)3.27
EPS Next 2Y7.83%
EPS Next 3Y7.55%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.32%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.32, AWK has a dividend in line with its industry peers.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.01%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
AWK pays out 55.65% 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.
DP55.65%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
140.83
-2.52 (-1.76%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.11%
Inst Owner Change0.01%
Ins Owners0.08%
Ins Owner Change4.96%
Market Cap27.46B
Analysts55.45
Price Target145.68 (3.44%)
Short Float %3.07%
Short Ratio4.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.65%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.25%
Min EPS beat(2)-3.67%
Max EPS beat(2)6.16%
EPS beat(4)1
Avg EPS beat(4)-1.74%
Min EPS beat(4)-4.73%
Max EPS beat(4)6.16%
EPS beat(8)4
Avg EPS beat(8)1.5%
EPS beat(12)6
Avg EPS beat(12)0.99%
EPS beat(16)8
Avg EPS beat(16)-0.24%
Revenue beat(2)2
Avg Revenue beat(2)6.49%
Min Revenue beat(2)5.74%
Max Revenue beat(2)7.23%
Revenue beat(4)4
Avg Revenue beat(4)5.3%
Min Revenue beat(4)2.04%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)4.06%
Revenue beat(12)10
Avg Revenue beat(12)2.48%
Revenue beat(16)10
Avg Revenue beat(16)0.22%
PT rev (1m)0%
PT rev (3m)3.92%
EPS NQ rev (1m)-0.52%
EPS NQ rev (3m)3.29%
EPS NY rev (1m)0.25%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.51%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)1.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.13 | ||
| Fwd PE | 22.85 | ||
| P/S | 5.7 | ||
| P/FCF | N/A | ||
| P/OCF | 13.77 | ||
| P/B | 2.61 | ||
| P/tB | 2.92 | ||
| EV/EBITDA | 16 |
EPS(TTM)5.39
EY3.83%
EPS(NY)6.16
Fwd EY4.38%
FCF(TTM)-4.11
FCFYN/A
OCF(TTM)10.23
OCFY7.26%
SpS24.69
BVpS54.02
TBVpS48.15
PEG (NY)2.9
PEG (5Y)3.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROCE | 5.74% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.36% | ||
| ROICexgc | 4.52% | ||
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| 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%
ROICexcg growth 3Y4.46%
ROICexcg 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-Score6
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.55 | ||
| Cap/Depr | 342.53% | ||
| Cap/Sales | 58.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.32% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 1.11 |
F-Score6
WACC8%
ROIC/WACC0.54
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)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
EPS Next Y9.01%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
EPS Next 5Y7.29%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
Revenue Next Year9.11%
Revenue Next 2Y7.86%
Revenue Next 3Y8.03%
Revenue Next 5Y7.26%
EBIT growth 1Y14.85%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year66.78%
EBIT Next 3Y27.09%
EBIT Next 5Y18.33%
FCF growth 1Y30.95%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y60.94%
OCF growth 3Y12.38%
OCF growth 5Y8.14%