AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
NYSE:AWK - US0304201033 - Common Stock
143.6 USD
+2.03 (+1.43%)
143.6 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to AWK. AWK was compared to 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. 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.
AWK had a positive operating cash flow in the past year.
In the past 5 years AWK has always been profitable.
In the past 5 years AWK always reported a positive cash flow from operatings.
1.2 Ratios
AWK's Return On Assets of 3.19% is in line compared to the rest of the industry. AWK outperforms 57.14% of its industry peers.
AWK has a better Return On Equity (10.14%) than 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.
Measured over the past 3 years, the Average Return On Invested Capital for AWK is in line with the industry average of 4.98%.
The last Return On Invested Capital (4.47%) for AWK is above the 3 year average (4.11%), which is a sign of increasing profitability.
| 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.
AWK has a better Operating Margin (36.48%) 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.
The number of shares outstanding for AWK has been increased compared to 5 years ago.
AWK has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.05, we must say that AWK is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.05, AWK is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Debt/Equity ratio of 1.30 is on the high side and indicates that AWK has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.30, AWK is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.05 |
ROIC/WACC0.59
WACC7.64%
2.3 Liquidity
AWK has a Current 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.
The Current ratio of AWK (0.35) is worse 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.
The Quick ratio of AWK (0.32) is worse than 92.86% of its industry peers.
| 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.
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.
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
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 Y8.86%
EPS Next 2Y7.9%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 26.25, the valuation of AWK can be described as expensive.
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 27.06. AWK is around the same levels.
The Price/Forward Earnings ratio is 23.27, 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.
When comparing the Price/Forward Earnings ratio of AWK to the average of the S&P500 Index (22.69), we can say AWK is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.25 | ||
| Fwd PE | 23.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AWK indicates a somewhat cheap valuation: AWK is cheaper than 64.29% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.61 |
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)2.96
PEG (5Y)3.29
EPS Next 2Y7.9%
EPS Next 3Y7.41%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.34%.
AWK's Dividend Yield is slightly below the industry average, which is at 3.38.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
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 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
56.23% 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.
DP56.23%
EPS Next 2Y7.9%
EPS Next 3Y7.41%
143.6
+2.03 (+1.43%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.41%
Inst Owner Change-1.73%
Ins Owners0.08%
Ins Owner Change1.13%
Market Cap28.02B
Analysts55.24
Price Target144.05 (0.31%)
Short Float %4.23%
Short Ratio6.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
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)-0.48%
PT rev (3m)-1.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.87%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)0.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.65%
Revenue NY rev (1m)-0.3%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.25 | ||
| Fwd PE | 23.27 | ||
| P/S | 5.67 | ||
| P/FCF | N/A | ||
| P/OCF | 14.37 | ||
| P/B | 2.62 | ||
| P/tB | 2.94 | ||
| EV/EBITDA | 15.61 |
EPS(TTM)5.47
EY3.81%
EPS(NY)6.17
Fwd EY4.3%
FCF(TTM)-4.65
FCFYN/A
OCF(TTM)9.99
OCFY6.96%
SpS25.33
BVpS54.75
TBVpS48.85
PEG (NY)2.96
PEG (5Y)3.29
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
WACC7.64%
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 Y8.86%
EPS Next 2Y7.9%
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 Year64.18%
EBIT Next 3Y26.02%
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%