AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
NYSE:AWK - New York Stock Exchange, Inc. - US0304201033 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to AWK. AWK was compared to 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AWK had positive earnings in the past year.
In the past year AWK had a positive cash flow from operations.
In the past 5 years AWK has always been profitable.
Each year in the past 5 years AWK had a positive operating cash flow.
1.2 Ratios
AWK has a Return On Assets (3.20%) which is in line with its industry peers.
AWK has a Return On Equity (10.17%) which is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 4.39%, AWK is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
AWK had an Average Return On Invested Capital over the past 3 years of 4.11%. This is in line with the industry average of 5.27%.
The 3 year average ROIC (4.11%) for AWK is below the current ROIC(4.39%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.17% | ||
| ROIC | 4.39% |
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 better Profit Margin (22.44%) than 64.29% of its industry peers.
AWK's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 36.68%, AWK is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
AWK's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.68% | ||
| PM (TTM) | 22.44% | ||
| 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.
The number of shares outstanding for AWK remains at a similar level compared to 1 year ago.
AWK has more shares outstanding than it did 5 years ago.
AWK has a worse debt/assets ratio than last year.
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.
AWK has a Altman-Z score (1.11) which is in line with its industry peers.
AWK has a Debt/Equity ratio of 1.30. This is a high value indicating a heavy dependency on external financing.
AWK has a worse Debt to Equity ratio (1.30) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.11 |
ROIC/WACC0.55
WACC7.96%
2.3 Liquidity
AWK has a Current Ratio of 0.39. 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 worse Current ratio (0.39) than 92.86% of its industry peers.
AWK has a Quick Ratio of 0.39. 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 0.35, AWK is doing worse than 92.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.16% 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.
Looking at the last year, AWK shows a quite strong growth in Revenue. The Revenue has grown by 10.63% in the last year.
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)5.16%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%30.43%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
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 7.29% on average per year.
Based on estimates for the next years, AWK will show a small growth in Revenue. The Revenue will grow by 6.99% on average per year.
EPS Next Y8.77%
EPS Next 2Y8.36%
EPS Next 3Y7.78%
EPS Next 5Y7.29%
Revenue Next Year7.77%
Revenue Next 2Y7.33%
Revenue Next 3Y7.4%
Revenue Next 5Y6.99%
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 28.00, which means the current valuation is very expensive for AWK.
Based on the Price/Earnings ratio, AWK is valued a bit more expensive than 71.43% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, AWK is valued at the same level.
Based on the Price/Forward Earnings ratio of 25.74, the valuation of AWK can be described as expensive.
AWK's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, AWK is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28 | ||
| Fwd PE | 25.74 |
4.2 Price Multiples
AWK's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.76 |
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)3.19
PEG (5Y)3.51
EPS Next 2Y8.36%
EPS Next 3Y7.78%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.14%.
Compared to an average industry Dividend Yield of 3.45, AWK is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.57, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
5.2 History
The dividend of AWK is nicely growing with an annual growth rate of 9.01%!
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
55.66% of the earnings are spent on dividend by AWK. 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.
DP55.66%
EPS Next 2Y8.36%
EPS Next 3Y7.78%
148.4
+2 (+1.37%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.6%
Inst Owner Change0.01%
Ins Owners0.1%
Ins Owner Change3.6%
Market Cap28.94B
Analysts67.37
Price Target140.18 (-5.54%)
Short Float %2.63%
Short Ratio3.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.66%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.73%
Min EPS beat(2)-4.7%
Max EPS beat(2)6.16%
EPS beat(4)1
Avg EPS beat(4)-2.27%
Min EPS beat(4)-5.83%
Max EPS beat(4)6.16%
EPS beat(8)4
Avg EPS beat(8)1.67%
EPS beat(12)7
Avg EPS beat(12)2.32%
EPS beat(16)8
Avg EPS beat(16)-0.1%
Revenue beat(2)2
Avg Revenue beat(2)6.71%
Min Revenue beat(2)6.18%
Max Revenue beat(2)7.23%
Revenue beat(4)4
Avg Revenue beat(4)4.35%
Min Revenue beat(4)1.96%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)3.75%
Revenue beat(12)9
Avg Revenue beat(12)1.51%
Revenue beat(16)10
Avg Revenue beat(16)0.1%
PT rev (1m)2.08%
PT rev (3m)-3.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)179.17%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)1.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28 | ||
| Fwd PE | 25.74 | ||
| P/S | 6.18 | ||
| P/FCF | N/A | ||
| P/OCF | 14.15 | ||
| P/B | 2.8 | ||
| P/tB | 3.15 | ||
| EV/EBITDA | 16.76 |
EPS(TTM)5.3
EY3.57%
EPS(NY)5.76
Fwd EY3.88%
FCF(TTM)-4.16
FCFYN/A
OCF(TTM)10.49
OCFY7.07%
SpS24.02
BVpS52.98
TBVpS47.12
PEG (NY)3.19
PEG (5Y)3.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.17% | ||
| ROCE | 5.79% | ||
| ROIC | 4.39% | ||
| ROICexc | 4.41% | ||
| ROICexgc | 4.58% | ||
| OM | 36.68% | ||
| PM (TTM) | 22.44% | ||
| 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-Score7
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.35 | ||
| Cap/Depr | 362.44% | ||
| Cap/Sales | 60.97% | ||
| Interest Coverage | 3.56 | ||
| Cash Conversion | 81.6% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.35 | ||
| Altman-Z | 1.11 |
F-Score7
WACC7.96%
ROIC/WACC0.55
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)5.16%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%30.43%
EPS Next Y8.77%
EPS Next 2Y8.36%
EPS Next 3Y7.78%
EPS Next 5Y7.29%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%16.38%
Revenue Next Year7.77%
Revenue Next 2Y7.33%
Revenue Next 3Y7.4%
Revenue Next 5Y6.99%
EBIT growth 1Y14.23%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year66.02%
EBIT Next 3Y25.87%
EBIT Next 5Y18.33%
FCF growth 1Y-15.69%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y9.12%
OCF growth 3Y12.38%
OCF growth 5Y8.14%