AMERICAN WATER WORKS CO INC (AWK)
US0304201033 - Common Stock
AWK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 14 industry peers in the Water Utilities industry. AWK scores excellent on profitability, but there are concerns on its financial health. AWK is quite expensive at the moment. 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.
Each year in the past 5 years AWK has 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 3.12%. This is in the better half of the industry: AWK outperforms 64.29% of its industry peers.
AWK has a better Return On Equity (9.64%) than 64.29% of its industry peers.
AWK has a better Return On Invested Capital (4.26%) than 78.57% 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 5.02%.
The 3 year average ROIC (4.02%) for AWK is below the current ROIC(4.26%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 9.64% | ||
| ROIC | 4.26% |
ROA(3y)3.64%
ROA(5y)3.3%
ROE(3y)12.53%
ROE(5y)11.75%
ROIC(3y)4.02%
ROIC(5y)4.18%
1.3 Margins
Looking at the Profit Margin, with a value of 22.30%, AWK is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
AWK's Profit Margin has improved in the last couple of years.
AWK has a better Operating Margin (35.52%) than 92.86% of its industry peers.
AWK's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 35.52% | ||
| PM (TTM) | 22.3% | ||
| GM | N/A |
OM growth 3Y2.44%
OM growth 5Y1.42%
PM growth 3Y5.9%
PM growth 5Y6.23%
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 more shares outstanding
AWK has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AWK has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.04, we must say that AWK is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AWK (1.04) is comparable to the rest of the industry.
AWK has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
AWK has a worse Debt to Equity ratio (1.21) than 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.04 |
ROIC/WACC0.54
WACC7.85%
2.3 Liquidity
AWK has a Current Ratio of 0.65. 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 (0.65) than 78.57% of its industry peers.
AWK has a Quick Ratio of 0.65. 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 Quick ratio (0.59) than 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
AWK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.77%, which is quite good.
AWK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.77% yearly.
AWK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.66%.
AWK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.24% yearly.
EPS 1Y (TTM)13.77%
EPS 3Y8.92%
EPS 5Y8.77%
EPS growth Q2Q26.03%
Revenue 1Y (TTM)11.66%
Revenue growth 3Y3.88%
Revenue growth 5Y4.24%
Revenue growth Q2Q10.85%
3.2 Future
The Earnings Per Share is expected to grow by 6.76% on average over the next years.
The Revenue is expected to grow by 7.42% on average over the next years.
EPS Next Y5.14%
EPS Next 2Y6.63%
EPS Next 3Y7.01%
EPS Next 5Y6.76%
Revenue Next Year6.05%
Revenue Next 2Y6.35%
Revenue Next 3Y6.68%
Revenue Next 5Y7.42%
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 decreasing.
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
The Price/Earnings ratio is 24.25, which indicates a rather expensive current valuation of AWK.
The rest of the industry has a similar Price/Earnings ratio as AWK.
Compared to an average S&P500 Price/Earnings ratio of 24.84, AWK is valued at the same level.
The Price/Forward Earnings ratio is 23.07, which indicates a rather expensive current valuation of AWK.
AWK's Price/Forward Earnings is on the same level as the industry average.
AWK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.25 | ||
| Fwd PE | 23.07 |
4.2 Price Multiples
64.29% of the companies in the same industry are more expensive than AWK, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.03 |
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)4.72
PEG (5Y)2.76
EPS Next 2Y6.63%
EPS Next 3Y7.01%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.33%. Purely for dividend investing, there may be better candidates out there.
AWK's Dividend Yield is slightly below the industry average, which is at 3.83.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
5.2 History
The dividend of AWK is nicely growing with an annual growth rate of 9.71%!
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)9.71%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
56.36% of the earnings are spent on dividend by AWK. 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.
DP56.36%
EPS Next 2Y6.63%
EPS Next 3Y7.01%
AMERICAN WATER WORKS CO INC
NYSE:AWK (4/29/2024, 2:56:09 PM)
122.24
+1.46 (+1.21%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap23.81B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.25 | ||
| Fwd PE | 23.07 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.72
PEG (5Y)2.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 9.64% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 35.52% | ||
| PM (TTM) | 22.3% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)13.77%
EPS 3Y8.92%
EPS 5Y
EPS growth Q2Q
EPS Next Y5.14%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.66%
Revenue growth 3Y3.88%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y