Stock in Focus: American Water Works (AWK)

Company Profile:

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 16 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, such as food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. The company serves approximately 15 million people with drinking water, wastewater, and other water-related services in 46 states. The company was founded in 1886 and is headquartered in Camden, New Jersey.

Recent News:

On September 25, 2020, the company announced the Company’s acquisition of the Granite City Wastewater Collection System. This purchase adds approximately 12,150 customer connections to the company’s customer base in southern Illinois. The company is committed to investing $27 million in first five years of ownership.

The company reported second quarter 2020 GAAP diluted earnings were $0.97 per share, compared to $0.94 per share in 2019, a 3.2% increase; year-to-date 2020 GAAP diluted earnings were $1.65 per share, compared to $1.56 per share in 2019, a 5.8% increase.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

AWK’s strengths can be seen in its strong profitability compared with its peers. Its revenue and net income have increased over recently several years. Technical indicators signal the bullish signs, as there is a bullish crossover in MACD and Stochastic oscillator. The RSI stands at 55.76 with positive bias. We rate American Water Works (AWK) a STRONG BUY.

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