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. While AWK is still in line with the averages on profitability rating, there are 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.
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
The Return On Assets of AWK (3.19%) is comparable to the rest of the industry.
With a decent Return On Equity value of 10.14%, AWK is doing good in the industry, outperforming 78.57% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.47%, 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 5.00%.
The 3 year average ROIC (4.11%) for AWK is below the current ROIC(4.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.19% | ||
| ROE | 10.14% | ||
| ROIC | 4.47% |
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
The Profit Margin of AWK (21.91%) is better than 64.29% of its industry peers.
AWK's Profit Margin has improved in the last couple of years.
The Operating Margin of AWK (36.48%) is better than 78.57% of its industry peers.
In the last couple of years the Operating Margin of AWK has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.48% | ||
| PM (TTM) | 21.91% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
Compared to 1 year ago, AWK has a worse debt to assets ratio.
2.2 Solvency
AWK has an Altman-Z score of 1.05. 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 (1.05) 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's Debt to Equity ratio of 1.30 is on the low side compared to the rest of the industry. AWK is outperformed by 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.05 |
ROIC/WACC0.59
WACC7.53%
2.3 Liquidity
A Current Ratio of 0.35 indicates that AWK may have some problems paying its short term obligations.
AWK has a worse Current ratio (0.35) than 92.86% of its industry peers.
A Quick Ratio of 0.32 indicates that AWK may have some problems paying its short term obligations.
With a Quick ratio value of 0.32, AWK is not doing good in the industry: 92.86% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.62% over the past year.
The Earnings Per Share has been growing slightly by 7.98% on average over the past years.
AWK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.37%.
The Revenue has been growing slightly by 5.35% on average over the past years.
EPS 1Y (TTM)9.62%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%5.71%
Revenue 1Y (TTM)13.37%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%11.05%
3.2 Future
The Earnings Per Share is expected to grow by 7.29% on average over the next years.
The Revenue is expected to grow by 7.26% on average over the next years.
EPS Next Y9.01%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
EPS Next 5Y7.29%
Revenue Next Year9.05%
Revenue Next 2Y7.77%
Revenue Next 3Y7.63%
Revenue Next 5Y7.26%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 26.31 indicates a quite expensive valuation of AWK.
Based on the Price/Earnings ratio, AWK is valued a bit more expensive than the industry average as 64.29% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 26.87. AWK is around the same levels.
The Price/Forward Earnings ratio is 23.35, which indicates a rather expensive current valuation of AWK.
64.29% of the companies in the same industry are cheaper than AWK, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.34, AWK is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 23.35 |
4.2 Price Multiples
AWK's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.59 |
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)2.92
PEG (5Y)3.3
EPS Next 2Y7.83%
EPS Next 3Y7.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.29%, AWK has a reasonable but not impressive dividend return.
AWK's Dividend Yield is slightly below the industry average, which is at 3.42.
Compared to an average S&P500 Dividend Yield of 2.39, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
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 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 56.23% 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.
DP56.23%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
143.92
+0.51 (+0.36%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.41%
Inst Owner Change-0.67%
Ins Owners0.08%
Ins Owner Change5.95%
Market Cap28.07B
Analysts55.45
Price Target144.74 (0.57%)
Short Float %3.26%
Short Ratio5.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP56.23%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.42%
Min EPS beat(2)-3.67%
Max EPS beat(2)-3.16%
EPS beat(4)1
Avg EPS beat(4)-1.34%
Min EPS beat(4)-4.7%
Max EPS beat(4)6.16%
EPS beat(8)3
Avg EPS beat(8)-0.26%
EPS beat(12)5
Avg EPS beat(12)0.5%
EPS beat(16)7
Avg EPS beat(16)-0.72%
Revenue beat(2)2
Avg Revenue beat(2)4.78%
Min Revenue beat(2)3.82%
Max Revenue beat(2)5.74%
Revenue beat(4)4
Avg Revenue beat(4)5.74%
Min Revenue beat(4)3.82%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)3.6%
Revenue beat(12)11
Avg Revenue beat(12)3.28%
Revenue beat(16)11
Avg Revenue beat(16)0.58%
PT rev (1m)-0.64%
PT rev (3m)-1.09%
EPS NQ rev (1m)-0.18%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)0%
EPS NY rev (3m)0.14%
Revenue NQ rev (1m)1.84%
Revenue NQ rev (3m)-0.65%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 23.35 | ||
| P/S | 5.68 | ||
| P/FCF | N/A | ||
| P/OCF | 14.39 | ||
| P/B | 2.63 | ||
| P/tB | 2.94 | ||
| EV/EBITDA | 15.59 |
EPS(TTM)5.47
EY3.8%
EPS(NY)6.16
Fwd EY4.28%
FCF(TTM)-4.66
FCFYN/A
OCF(TTM)10
OCFY6.95%
SpS25.34
BVpS54.78
TBVpS48.87
PEG (NY)2.92
PEG (5Y)3.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.19% | ||
| ROE | 10.14% | ||
| ROCE | 6.03% | ||
| ROIC | 4.47% | ||
| ROICexc | 4.48% | ||
| ROICexgc | 4.65% | ||
| OM | 36.48% | ||
| PM (TTM) | 21.91% | ||
| 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 | 1.3 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.24 | ||
| Cap/Depr | 338.63% | ||
| Cap/Sales | 57.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.67% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 1.05 |
F-Score6
WACC7.53%
ROIC/WACC0.59
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)9.62%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%5.71%
EPS Next Y9.01%
EPS Next 2Y7.83%
EPS Next 3Y7.55%
EPS Next 5Y7.29%
Revenue 1Y (TTM)13.37%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%11.05%
Revenue Next Year9.05%
Revenue Next 2Y7.77%
Revenue Next 3Y7.63%
Revenue Next 5Y7.26%
EBIT growth 1Y16.17%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year64.18%
EBIT Next 3Y26.02%
EBIT Next 5Y18.33%
FCF growth 1Y-9.53%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y19.93%
OCF growth 3Y12.38%
OCF growth 5Y8.14%