AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
USA - NYSE:AWK - US0304201033 - Common Stock
136.36 USD
+1.26 (+0.93%)
136.36 USD
0 (0%)
Overall AWK gets a fundamental rating of 4 out of 10. We evaluated AWK against 14 industry peers in the Water Utilities industry. While AWK belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, AWK is valued expensive at the moment.
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 3.19%, AWK is in line with its industry, outperforming 57.14% of the companies in the same industry.
AWK has a Return On Equity of 10.14%. This is amongst the best in the industry. AWK outperforms 85.71% of its industry peers.
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 4.98%.
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
AWK's Profit Margin of 21.91% is fine compared to the rest of the industry. AWK outperforms 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.
AWK's Operating Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AWK 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
Based on the Altman-Z score of 1.02, we must say that AWK is in the distress zone and has some risk of bankruptcy.
AWK's Altman-Z score of 1.02 is in line compared to the rest of the industry. AWK outperforms 50.00% of its industry peers.
A Debt/Equity ratio of 1.30 is on the high side and indicates that AWK has dependencies on debt financing.
The Debt to Equity ratio of AWK (1.30) is worse than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.02 |
ROIC/WACC0.6
WACC7.51%
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.
AWK has a Quick Ratio of 0.35. This is a bad value and indicates that AWK is not financially healthy enough and could expect problems in meeting 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
AWK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.62%, which is quite good.
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.
The Revenue has grown by 13.37% in the past year. This is quite good.
AWK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.35% yearly.
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
Based on estimates for the next years, AWK will show a small growth in Earnings Per Share. The EPS will grow by 7.26% on average per year.
AWK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.40% yearly.
EPS Next Y8.88%
EPS Next 2Y7.91%
EPS Next 3Y7.41%
EPS Next 5Y7.26%
Revenue Next Year8.72%
Revenue Next 2Y7.39%
Revenue Next 3Y7.06%
Revenue Next 5Y6.4%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.93 indicates a rather expensive valuation of AWK.
64.29% of the companies in the same industry are cheaper than AWK, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of AWK to the average of the S&P500 Index (27.54), we can say AWK is valued inline with the index average.
AWK is valuated rather expensively with a Price/Forward Earnings ratio of 22.09.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AWK indicates a slightly more expensive valuation: AWK is more expensive than 64.29% of the companies listed in the same industry.
AWK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.05, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.93 | ||
| Fwd PE | 22.09 |
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 | 15.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AWK has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.81
PEG (5Y)3.12
EPS Next 2Y7.91%
EPS Next 3Y7.41%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.43%.
Compared to an average industry Dividend Yield of 3.38, AWK is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.41, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
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.
The dividend of AWK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP56.23%
EPS Next 2Y7.91%
EPS Next 3Y7.41%
136.36
+1.26 (+0.93%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners95.06%
Inst Owner Change-1.73%
Ins Owners0.08%
Ins Owner Change1.13%
Market Cap26.60B
Analysts55.24
Price Target144.05 (5.64%)
Short Float %4.33%
Short Ratio6.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
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%
PT rev (3m)-1.12%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-0.9%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.84%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.93 | ||
| Fwd PE | 22.09 | ||
| P/S | 5.38 | ||
| P/FCF | N/A | ||
| P/OCF | 13.64 | ||
| P/B | 2.49 | ||
| P/tB | 2.79 | ||
| EV/EBITDA | 15.08 |
EPS(TTM)5.47
EY4.01%
EPS(NY)6.17
Fwd EY4.53%
FCF(TTM)-4.65
FCFYN/A
OCF(TTM)9.99
OCFY7.33%
SpS25.33
BVpS54.75
TBVpS48.85
PEG (NY)2.81
PEG (5Y)3.12
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 | 1.02 |
F-Score6
WACC7.51%
ROIC/WACC0.6
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 Y8.88%
EPS Next 2Y7.91%
EPS Next 3Y7.41%
EPS Next 5Y7.26%
Revenue 1Y (TTM)13.37%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%11.05%
Revenue Next Year8.72%
Revenue Next 2Y7.39%
Revenue Next 3Y7.06%
Revenue Next 5Y6.4%
EBIT growth 1Y16.17%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year63.83%
EBIT Next 3Y25.59%
EBIT Next 5Y17.25%
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%