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Reasons to Add American Water Works (AWK) to Your Portfolio
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American Water Works Company, Inc.’s (AWK - Free Report) strategic capital investments to strengthen infrastructure and improve reliability are likely to boost its performance. Given its growth opportunities, AWK makes for a solid investment option in the utility sector.
The company currently carries a Zacks Rank #2 (Buy). Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased 0.4% in the past 30 days to $5.26.
The consensus estimate for 2024 sales is pegged at $4.37 billion, which indicates a year-over-year growth of 3.3%.
AWK’s long-term (three to five years) earnings growth rate is 8%. It delivered an average earnings surprise of 1.1% in the past four quarters.
Dividend Yield
AWK distributes dividends to shareholders on a regular basis. Its current dividend yield is 2.17%, which is better than the Zacks S&P 500 composite’s average of 1.27%. It expects its dividend per share to increase in the range of 7-9% in the long term.
Debt Position
Currently, AWK’s total debt to capital is 56.4%, better than the sector’s average of 59.65%.
The company’s time-to-interest earned ratio at the end of the second quarter was 3.5. The ratio, being greater than one, reflects its ability to meet future interest obligations without difficulties.
Systemic Investments
American Water Works has been investing regularly to upgrade, expand and maintain its vast water and wastewater infrastructure. In the first half of 2024, the company invested $1.4 billion in upgrades and acquisitions. It plans to invest $3.1 billion in the full year to strengthen and expand its water and wastewater infrastructure.
The company aims to invest $16-$17 billion during the 2024-2028 period and $34-$38 billion in the 2024-2033 period. Nearly 68% of the planned expenditure in 2024-2033 will be directed toward strengthening the infrastructure.
Price Performance
Shares of AWK have gained 16.4% in the past six months compared with the industry’s 13.5% growth.
American States Water delivered an average earnings surprise of 3.4% in the last four quarters. The Zacks Consensus Estimate for 2024 earnings is pegged at $3.03 per share, which indicates year-over-year growth of 6.3%.
SJW Group delivered an average earnings surprise of 9.3% in the last four quarters. The consensus estimate for 2024 earnings is pegged at $2.76 per share, which indicates year-over-year growth of 3%.
NiSource delivered an average earnings surprise of 20.6% in the last four quarters. The Zacks Consensus Estimate for 2024 EPS is pegged at $1.72, which indicates year-over-year growth of 7.5%.
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Reasons to Add American Water Works (AWK) to Your Portfolio
American Water Works Company, Inc.’s (AWK - Free Report) strategic capital investments to strengthen infrastructure and improve reliability are likely to boost its performance. Given its growth opportunities, AWK makes for a solid investment option in the utility sector.
The company currently carries a Zacks Rank #2 (Buy). Let’s look at the factors that are driving the stock.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased 0.4% in the past 30 days to $5.26.
The consensus estimate for 2024 sales is pegged at $4.37 billion, which indicates a year-over-year growth of 3.3%.
AWK’s long-term (three to five years) earnings growth rate is 8%. It delivered an average earnings surprise of 1.1% in the past four quarters.
Dividend Yield
AWK distributes dividends to shareholders on a regular basis. Its current dividend yield is 2.17%, which is better than the Zacks S&P 500 composite’s average of 1.27%. It expects its dividend per share to increase in the range of 7-9% in the long term.
Debt Position
Currently, AWK’s total debt to capital is 56.4%, better than the sector’s average of 59.65%.
The company’s time-to-interest earned ratio at the end of the second quarter was 3.5. The ratio, being greater than one, reflects its ability to meet future interest obligations without difficulties.
Systemic Investments
American Water Works has been investing regularly to upgrade, expand and maintain its vast water and wastewater infrastructure. In the first half of 2024, the company invested $1.4 billion in upgrades and acquisitions. It plans to invest $3.1 billion in the full year to strengthen and expand its water and wastewater infrastructure.
The company aims to invest $16-$17 billion during the 2024-2028 period and $34-$38 billion in the 2024-2033 period. Nearly 68% of the planned expenditure in 2024-2033 will be directed toward strengthening the infrastructure.
Price Performance
Shares of AWK have gained 16.4% in the past six months compared with the industry’s 13.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks in the sector are American States Water Company (AWR - Free Report) , SJW Group (SJW - Free Report) and NiSource Inc. (NI - Free Report) . Each of these stocks currently carries a Zacks Rank of 2. You can see the complete list of Zacks Rank #1 (Strong Buy) stocks here.
American States Water delivered an average earnings surprise of 3.4% in the last four quarters. The Zacks Consensus Estimate for 2024 earnings is pegged at $3.03 per share, which indicates year-over-year growth of 6.3%.
SJW Group delivered an average earnings surprise of 9.3% in the last four quarters. The consensus estimate for 2024 earnings is pegged at $2.76 per share, which indicates year-over-year growth of 3%.
NiSource delivered an average earnings surprise of 20.6% in the last four quarters. The Zacks Consensus Estimate for 2024 EPS is pegged at $1.72, which indicates year-over-year growth of 7.5%.