Skip to Content
Morningstar
Get 14 Days Free

American Water Works Co Inc AWK

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

American Water Signals Visibility for Acquisition Targets; Increasing Our Fair Value Estimate

Charles Fishman, CFA Equity Analyst

Analyst Note

| Charles Fishman, CFA |

We are increasing our fair value estimate to $122 per share from $113 after American Water Works reported strong 2020 earnings, increased its five-year capital expenditure forecast, and reaffirmed its 7%-10% long-term EPS growth target. The increase in our fair value estimate was primarily due to the increase in our estimate of future investment opportunities and the impact on earnings growth. Our fair value estimate also benefited from time-value appreciation.

Read Full Analysis

Company Profile

Business Description

Founded in 1886, American Water Works is the largest investor-owned U.S. water and wastewater utility, serving approximately 3.5 million customers in 16 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets, which account for about 90% of earnings. Its nonregulated market-based businesses provide complementary water and wastewater services for municipalities and military bases.

Contact
1 Water Street
Camden, NJ, 08102-1658
T +1 856 955-4001
Sector Utilities
Industry Utilities - Regulated Water
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 7,000

Related

Stock Strategist Industry Reports
Utilities Have Rarely Been This Attractive
We see the best values in high-quality gas utilities.
Travis Miller
Stock Strategist Industry Reports
Utility Dividend Leaders and Laggards
In a post-pandemic world, most utilities’ dividends offer investors an attractive income alternative.
Andrew Bischof
US Videos
4 Stocks With Healthy Dividend Growth Potential
These utilities feature low payout ratios, solid investment opportunities, and constructive regulatory environments--though they’re not cheap.
Morningstar
US Videos
3 Dividend Growth Leaders
Morningstar forecasts high dividend-growth potential for some utilities and less for others.
Andrew Bischof
Stock Strategist Industry Reports
Dividend Leaders and Laggards Among Utilities
Equity valuations remain rich but still offer opportunities for income.
Andrew Bischof
Advisor Insights
More Talent at the Top
Pax makes a case that gender diversity improves investment returns.
Tom Lauricella
Fund Spy: Morningstar Medalist Edition
Third-Quarter Winners and Losers Among U.S. Stock Funds
Domestic equities continued to reach new highs.
Andrew Daniels
Quarter-End Insights
Utilities: Low Rates Keep the Sector's Lovefest Raging
Only the Fed could break up utilities' M&A party.
Travis Miller
Quarter-End Insights
Utilities: Starting to Look Attractive After a Woeful 2015 Start
Utilities' 4% dividend yields still look attractive even with the chance for rising interest rates.
Travis Miller
Quarter-End Insights
Utilities: Bloody February Brings Valuations Back In Line
We don't see an end to this atypical volatility until interest rates rise back toward historical norms.
Travis Miller
US Videos
2 Utilities Stocks to Bookmark
The regulated-utilities sector is significantly overvalued after 2014's monster gains, but investors looking for exposure should keep an eye on Southern Company and Duke Energy.
Travis Miller
Quarter-End Insights
Utilities: Repeating a Stellar 2014 Performance Will Be Tough
Utilities' 23% total return through mid-December topped all sectors except for M&A-fueled health care.
Travis Miller
Quarter-End Insights
Utilities: Roller-Coaster Ride Continues, but Fundamentals Are Strong
Stock price volatility offers opportunities for investors committed to holding utilities for the long run.
Travis Miller
Quarter-End Insights
Utilities Power Past Fair Value
Some of the most defensive companies in the utilities sector have performed the best this year and could face a sharp drop if interest rates start to creep up.
Travis Miller
Quarter-End Insights
Our Outlook for Utilities Stocks
With interest rates rising, will dividend yields keep utilities afloat?
Travis Miller
Quarter-End Insights
Our Outlook for Utilities Stocks
Utilities show no signs of slowing down with yields that look as good as ever.
Travis Miller
Quarter-End Insights
Our Outlook for Utilities Stocks
Pegging the direction of utilities stocks in 2013 is not for the faint of heart.
Travis Miller
Quarter-End Insights
Our Outlook for Utilities Stocks
With interest rates leveling off and power markets stalled, utilities face a tough near-term outlook.
Travis Miller
Investing Specialists
Dividend-Paying Stocks Continue to Garner Attention
While our list of Ultimate Stock-Pickers is not imbued with equity-income investors, the allure of dividend-paying stocks has not gone unnoticed by our top managers, especially with bond yields at historically low levels and interest rates bound to go up over the next several years.
The Morningstar Ultimate Stock-Pickers Team
Quarter-End Insights
Our Outlook for Utilities Stocks
Fast-approaching environmental regulation could reshape the utilities sector.
Travis Miller