AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AWK - US0304201033 - Common Stock
130.25 USD
-2.77 (-2.08%)
130.25 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to AWK. AWK was compared to 15 industry peers in the Water Utilities industry. AWK has an excellent profitability rating, but 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
AWK has a better Return On Assets (3.20%) than 66.67% of its industry peers.
Looking at the Return On Equity, with a value of 10.20%, AWK belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
The Return On Invested Capital of AWK (4.57%) is better than 80.00% 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 4.61%.
The 3 year average ROIC (4.11%) for AWK is below the current ROIC(4.57%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.2% | ||
| ROIC | 4.57% |
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
Looking at the Profit Margin, with a value of 21.93%, AWK is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
AWK's Profit Margin has improved in the last couple of years.
AWK's Operating Margin of 36.96% is amongst the best of the industry. AWK outperforms 86.67% of its industry peers.
In the last couple of years the Operating Margin of AWK has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.96% | ||
| PM (TTM) | 21.93% | ||
| 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.
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 1.01, we must say that AWK is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.01, AWK perfoms like the industry average, outperforming 53.33% of the companies in the same industry.
A Debt/Equity ratio of 1.29 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 1.29, AWK is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.01 |
ROIC/WACC0.63
WACC7.2%
2.3 Liquidity
AWK has a Current Ratio of 0.42. 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 Current ratio value of 0.42, AWK is not doing good in the industry: 86.67% of the companies in the same industry are doing better.
AWK has a Quick Ratio of 0.42. 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 Quick ratio of 0.39 is on the low side compared to the rest of the industry. AWK is outperformed by 86.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
AWK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.35%, which is quite good.
AWK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.98% yearly.
Looking at the last year, AWK shows a quite strong growth in Revenue. The Revenue has grown by 12.29% in the last year.
The Revenue has been growing slightly by 5.35% on average over the past years.
EPS 1Y (TTM)12.35%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.6%
Revenue 1Y (TTM)12.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%9.67%
3.2 Future
AWK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.48% yearly.
The Revenue is expected to grow by 7.90% on average over the next years.
EPS Next Y9.26%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
EPS Next 5Y7.48%
Revenue Next Year10.7%
Revenue Next 2Y8.73%
Revenue Next 3Y8.1%
Revenue Next 5Y7.9%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 23.09, which indicates a rather expensive current valuation of AWK.
The rest of the industry has a similar Price/Earnings ratio as AWK.
When comparing the Price/Earnings ratio of AWK to the average of the S&P500 Index (26.38), we can say AWK is valued inline with the index average.
The Price/Forward Earnings ratio is 21.15, which indicates a rather expensive current valuation of AWK.
AWK's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.83. AWK is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.09 | ||
| Fwd PE | 21.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AWK is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.61 |
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)2.49
PEG (5Y)2.89
EPS Next 2Y7.8%
EPS Next 3Y7.52%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.49%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.76, AWK is paying slightly less dividend.
AWK's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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
55.85% 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.
DP55.85%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
130.25
-2.77 (-2.08%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners98.56%
Inst Owner Change4.89%
Ins Owners0.08%
Ins Owner Change0.09%
Market Cap25.41B
Revenue(TTM)5.07B
Net Income(TTM)1.11B
Analysts67.37
Price Target144.48 (10.93%)
Short Float %4.26%
Short Ratio4.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.85%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.43%
Min EPS beat(2)-3.16%
Max EPS beat(2)2.31%
EPS beat(4)2
Avg EPS beat(4)0.41%
Min EPS beat(4)-3.67%
Max EPS beat(4)6.16%
EPS beat(8)3
Avg EPS beat(8)-0.48%
EPS beat(12)5
Avg EPS beat(12)0.14%
EPS beat(16)8
Avg EPS beat(16)-0.52%
Revenue beat(2)2
Avg Revenue beat(2)5.06%
Min Revenue beat(2)3.82%
Max Revenue beat(2)6.3%
Revenue beat(4)4
Avg Revenue beat(4)5.77%
Min Revenue beat(4)3.82%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)4.18%
Revenue beat(12)11
Avg Revenue beat(12)3.8%
Revenue beat(16)12
Avg Revenue beat(16)1.68%
PT rev (1m)-0.52%
PT rev (3m)0.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.04%
EPS NY rev (1m)0.27%
EPS NY rev (3m)0.36%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.33%
Revenue NY rev (1m)0.91%
Revenue NY rev (3m)1.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.09 | ||
| Fwd PE | 21.15 | ||
| P/S | 5.01 | ||
| P/FCF | N/A | ||
| P/OCF | 12.49 | ||
| P/B | 2.33 | ||
| P/tB | 2.61 | ||
| EV/EBITDA | 14.61 |
EPS(TTM)5.64
EY4.33%
EPS(NY)6.16
Fwd EY4.73%
FCF(TTM)-4.8
FCFYN/A
OCF(TTM)10.43
OCFY8.01%
SpS25.98
BVpS55.9
TBVpS50
PEG (NY)2.49
PEG (5Y)2.89
Graham Number84.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.2% | ||
| ROE | 10.2% | ||
| ROCE | 6.03% | ||
| ROIC | 4.57% | ||
| ROICexc | 4.59% | ||
| ROICexgc | 4.76% | ||
| OM | 36.96% | ||
| PM (TTM) | 21.93% | ||
| 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%
ROICexgc growth 3Y4.46%
ROICexgc 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-Score7
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.11 | ||
| Cap/Depr | 341.61% | ||
| Cap/Sales | 58.62% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.16% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.39 | ||
| Altman-Z | 1.01 |
F-Score7
WACC7.2%
ROIC/WACC0.63
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)12.35%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.6%
EPS Next Y9.26%
EPS Next 2Y7.8%
EPS Next 3Y7.52%
EPS Next 5Y7.48%
Revenue 1Y (TTM)12.29%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%9.67%
Revenue Next Year10.7%
Revenue Next 2Y8.73%
Revenue Next 3Y8.1%
Revenue Next 5Y7.9%
EBIT growth 1Y15.89%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year68.74%
EBIT Next 3Y30.3%
EBIT Next 5Y18.89%
FCF growth 1Y-18.91%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y20.34%
OCF growth 3Y12.38%
OCF growth 5Y8.14%
AMERICAN WATER WORKS CO INC / AWK FAQ
Can you provide the ChartMill fundamental rating for AMERICAN WATER WORKS CO INC?
ChartMill assigns a fundamental rating of 4 / 10 to AWK.
What is the valuation status for AWK stock?
ChartMill assigns a valuation rating of 2 / 10 to AMERICAN WATER WORKS CO INC (AWK). This can be considered as Overvalued.
What is the profitability of AWK stock?
AMERICAN WATER WORKS CO INC (AWK) has a profitability rating of 7 / 10.
What is the earnings growth outlook for AMERICAN WATER WORKS CO INC?
The Earnings per Share (EPS) of AMERICAN WATER WORKS CO INC (AWK) is expected to grow by 9.26% in the next year.
Is the dividend of AMERICAN WATER WORKS CO INC sustainable?
The dividend rating of AMERICAN WATER WORKS CO INC (AWK) is 5 / 10 and the dividend payout ratio is 55.85%.