AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
NYSE:AWK - New York Stock Exchange, Inc. - US0304201033 - Common Stock - Currency: USD
Taking everything into account, AWK scores 3 out of 10 in our fundamental rating. 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
AWK had positive earnings in the past year.
In the past year AWK had a positive cash flow from operations.
AWK had positive earnings in each of the past 5 years.
AWK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AWK has a Return On Assets (3.23%) which is comparable to the rest of the industry.
AWK has a Return On Equity of 10.17%. This is in the better half of the industry: AWK outperforms 71.43% of its industry peers.
AWK has a better Return On Invested Capital (4.34%) than 71.43% of its industry peers.
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 5.08%.
The last Return On Invested Capital (4.34%) for AWK is above the 3 year average (4.11%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROIC | 4.34% |
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 (22.24%) than 71.43% of its industry peers.
In the last couple of years the Profit Margin of AWK has grown nicely.
AWK's Operating Margin of 36.61% is fine compared to the rest of the industry. AWK outperforms 71.43% of its industry peers.
AWK's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| 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
AWK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
AWK has an Altman-Z score of 1.10. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.10, AWK is in line with its industry, outperforming 50.00% of the companies in the same industry.
AWK has a Debt/Equity ratio of 1.36. This is a high value indicating a heavy dependency on external financing.
AWK's Debt to Equity ratio of 1.36 is on the low side compared to the rest of the industry. AWK is outperformed by 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.1 |
ROIC/WACC0.55
WACC7.93%
2.3 Liquidity
AWK has a Current Ratio of 0.49. 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's Current ratio of 0.49 is on the low side compared to the rest of the industry. AWK is outperformed by 85.71% of its industry peers.
A Quick Ratio of 0.44 indicates that AWK may have some problems paying its short term obligations.
AWK's Quick ratio of 0.44 is on the low side compared to the rest of the industry. AWK is outperformed by 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
AWK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.52%.
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 11.79% 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)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
3.2 Future
The Earnings Per Share is expected to grow by 7.29% on average over the next years.
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 Y8.74%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
EPS Next 5Y7.29%
Revenue Next Year8.55%
Revenue Next 2Y7.33%
Revenue Next 3Y7.37%
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.
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
AWK is valuated quite expensively with a Price/Earnings ratio of 25.94.
64.29% of the companies in the same industry are cheaper than AWK, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.53, AWK is valued at the same level.
The Price/Forward Earnings ratio is 22.57, which indicates a rather expensive current valuation of AWK.
Based on the Price/Forward Earnings ratio, AWK is valued a bit more expensive than the industry average as 64.29% of the companies are valued more cheaply.
AWK's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.94 | ||
| Fwd PE | 22.57 |
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 | 15.76 |
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)2.97
PEG (5Y)3.25
EPS Next 2Y8.1%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.36%, AWK has a reasonable but not impressive dividend return.
AWK's Dividend Yield is slightly below the industry average, which is at 3.48.
AWK's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
5.2 History
On average, the dividend of AWK grows each year by 9.01%, which is quite nice.
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
55.65% 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.
DP55.65%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
139.81
-0.24 (-0.17%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.6%
Inst Owner Change1.25%
Ins Owners0.1%
Ins Owner Change4.73%
Market Cap27.26B
Analysts55.65
Price Target145.68 (4.2%)
Short Float %2.32%
Short Ratio2.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.65%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.25%
Min EPS beat(2)-3.67%
Max EPS beat(2)6.16%
EPS beat(4)1
Avg EPS beat(4)-1.74%
Min EPS beat(4)-4.73%
Max EPS beat(4)6.16%
EPS beat(8)4
Avg EPS beat(8)1.5%
EPS beat(12)6
Avg EPS beat(12)0.99%
EPS beat(16)8
Avg EPS beat(16)-0.24%
Revenue beat(2)2
Avg Revenue beat(2)6.49%
Min Revenue beat(2)5.74%
Max Revenue beat(2)7.23%
Revenue beat(4)4
Avg Revenue beat(4)5.3%
Min Revenue beat(4)2.04%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)4.06%
Revenue beat(12)10
Avg Revenue beat(12)2.48%
Revenue beat(16)10
Avg Revenue beat(16)0.22%
PT rev (1m)-0.45%
PT rev (3m)6.08%
EPS NQ rev (1m)1.55%
EPS NQ rev (3m)22.07%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)-0.12%
Revenue NQ rev (1m)-0.98%
Revenue NQ rev (3m)-1.54%
Revenue NY rev (1m)-0.5%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.94 | ||
| Fwd PE | 22.57 | ||
| P/S | 5.66 | ||
| P/FCF | N/A | ||
| P/OCF | 13.67 | ||
| P/B | 2.59 | ||
| P/tB | 2.9 | ||
| EV/EBITDA | 15.76 |
EPS(TTM)5.39
EY3.86%
EPS(NY)6.19
Fwd EY4.43%
FCF(TTM)-4.11
FCFYN/A
OCF(TTM)10.23
OCFY7.31%
SpS24.69
BVpS54.02
TBVpS48.15
PEG (NY)2.97
PEG (5Y)3.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROCE | 5.74% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.36% | ||
| ROICexgc | 4.52% | ||
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| 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 | 1.36 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.55 | ||
| Cap/Depr | 342.53% | ||
| Cap/Sales | 58.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.32% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 1.1 |
F-Score6
WACC7.93%
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)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
EPS Next Y8.74%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
EPS Next 5Y7.29%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
Revenue Next Year8.55%
Revenue Next 2Y7.33%
Revenue Next 3Y7.37%
Revenue Next 5Y6.99%
EBIT growth 1Y14.85%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year66.78%
EBIT Next 3Y27.09%
EBIT Next 5Y18.33%
FCF growth 1Y30.95%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y60.94%
OCF growth 3Y12.38%
OCF growth 5Y8.14%