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. There are concerns on the financial health of AWK while its profitability can be described as average. 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.
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
AWK's Return On Assets of 3.23% is in line compared to the rest of the industry. AWK outperforms 57.14% of its industry peers.
AWK's Return On Equity of 10.17% is fine compared to the rest of the industry. AWK outperforms 71.43% of its industry peers.
AWK's Return On Invested Capital of 4.34% is fine compared to the rest of the industry. AWK outperforms 71.43% 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 5.08%.
The 3 year average ROIC (4.11%) for AWK is below the current ROIC(4.34%), indicating increased profibility in the last year.
| 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's Profit Margin of 22.24% is fine compared to the rest of the industry. AWK outperforms 71.43% of its industry peers.
AWK's Profit Margin has improved in the last couple of years.
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.
Compared to 1 year ago, AWK has about the same amount of shares outstanding.
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 1.09. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
AWK's Altman-Z score of 1.09 is in line compared to the rest of the industry. AWK outperforms 50.00% of its industry peers.
A Debt/Equity ratio of 1.36 is on the high side and indicates that AWK has dependencies on debt financing.
The Debt to Equity ratio of AWK (1.36) is worse than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.09 |
ROIC/WACC0.47
WACC9.2%
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.
Looking at the Current ratio, with a value of 0.49, AWK is doing worse than 85.71% of the companies in the same industry.
AWK has a Quick 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.
Looking at the Quick ratio, with a value of 0.44, AWK is doing worse than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.52% 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.
The Revenue has grown by 11.79% in the past year. This is quite good.
The Revenue has been growing slightly by 5.35% on average over the past years.
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.
The Revenue is expected to grow by 7.26% on average over the next years.
EPS Next Y8.88%
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 5Y7.26%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
Based on the Price/Earnings ratio of 26.45, the valuation of AWK can be described as expensive.
AWK's Price/Earnings ratio is a bit more expensive when compared to the industry. AWK is more expensive than 64.29% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. AWK is around the same levels.
A Price/Forward Earnings ratio of 23.02 indicates a rather expensive 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 21.70, AWK is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.45 | ||
| Fwd PE | 23.02 |
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 | 15.68 |
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)2.98
PEG (5Y)3.31
EPS Next 2Y8.1%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.39%, AWK has a reasonable but not impressive dividend return.
AWK's Dividend Yield is slightly below the industry average, which is at 3.44.
Compared to an average S&P500 Dividend Yield of 2.42, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
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 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
55.65% 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.
DP55.65%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
142.56
+3.45 (+2.48%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.11%
Inst Owner Change1.25%
Ins Owners0.08%
Ins Owner Change4.96%
Market Cap27.80B
Analysts55.65
Price Target145.68 (2.19%)
Short Float %2.86%
Short Ratio4.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
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)4.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.27%
EPS NY rev (1m)0.13%
EPS NY rev (3m)0.1%
Revenue NQ rev (1m)-2.88%
Revenue NQ rev (3m)1.51%
Revenue NY rev (1m)-1.18%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.45 | ||
| Fwd PE | 23.02 | ||
| P/S | 5.77 | ||
| P/FCF | N/A | ||
| P/OCF | 13.94 | ||
| P/B | 2.64 | ||
| P/tB | 2.96 | ||
| EV/EBITDA | 15.68 |
EPS(TTM)5.39
EY3.78%
EPS(NY)6.19
Fwd EY4.34%
FCF(TTM)-4.11
FCFYN/A
OCF(TTM)10.23
OCFY7.17%
SpS24.69
BVpS54.02
TBVpS48.15
PEG (NY)2.98
PEG (5Y)3.31
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 | 1.09 |
F-Score6
WACC9.2%
ROIC/WACC0.47
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 Y8.88%
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 5Y7.26%
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%