American Water Works Co., Inc. (AWK) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Select Water Solutions, Inc.

Consolidated Water Co. Ltd.

Artesian Resources Corp.

Essential Utilities, Inc.

American States Water Co.

Middlesex Water Co.

American Water Works Co., Inc.

SJW Group

Aris Water Solutions, Inc.

The York Water Co.

California Water Service Group

Why is American Water Works Co., Inc. ?

Poor long term growth as Net Sales has grown by an annual rate of 6.02% and Operating profit at 8.05% over the last 5 years

Positive results in Jun 25

OPERATING CASH FLOW(Y) Highest at USD 1,950 MM
DIVIDEND PER SHARE(HY) Highest at USD 6.06
DIVIDEND PAYOUT RATIO(Y) Highest at 55.84%

With ROCE of 7.12%, it has a expensive valuation with a 1.71 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -0.19%, its profits have risen by 11.7% ; the PEG ratio of the company is 2.3

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -0.19% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to American Water Works Co., Inc. should be less than 10%
Overall Portfolio exposure to Other Utilities should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Other Utilities)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is American Water Works Co., Inc. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

American Water Works Co., Inc.

-10.62%

0.05

24.55%

S&P 500

26.39%

0.70

20.15%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.36%

EBIT Growth (5y)

8.53%

EBIT to Interest (avg)

3.12

Debt to EBITDA (avg)

5.60

Net Debt to Equity (avg)

1.35

Sales to Capital Employed (avg)

0.19

Tax Ratio

22.78%

Dividend Payout Ratio

58.10%

Pledged Shares

Institutional Holding

97.43%

ROCE (avg)

6.86%

ROE (avg)

11.33%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.53

EV to EBIT

22.94

EV to EBITDA

15.55

EV to Capital Employed

1.63

EV to Sales

8.39

PEG Ratio

4.42

Dividend Yield

176.73%

ROCE (Latest)

7.09%

ROE (Latest)

10.25%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bullish

Bearish

Dow Theory

Mildly Bearish

Mildly Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

9What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 2,033 MM

INVENTORY TURNOVER RATIO(HY)

Highest at 26.73 times

DIVIDEND PER SHARE(HY)

Highest at USD 6.18

DIVIDEND PAYOUT RATIO(Y)

Highest at 89.05%

RAW MATERIAL COST(Y)

Fallen by 0.46% (YoY

-9What is not working for the Company

DEBT-EQUITY RATIO (HY)

Highest at 140.43 %

INTEREST COVERAGE RATIO(Q)

Lowest at 388.34

PRE-TAX PROFIT(Q)

Lowest at USD 264 MM

NET PROFIT(Q)

Lowest at USD 199.78 MM

EPS(Q)

Lowest at USD 1.01

Here's what is working for American Water Works Co., Inc.

Operating Cash Flow

Highest at USD 2,033 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Inventory Turnover Ratio

Highest at 26.73 times and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Dividend per share

Highest at USD 6.18 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Dividend Payout Ratio

Highest at 89.05%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Fallen by 0.46% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Depreciation

Highest at USD 237 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for American Water Works Co., Inc.

Interest Coverage Ratio

Lowest at 388.34

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Debt-Equity Ratio

Highest at 140.43 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Pre-Tax Profit

Lowest at USD 264 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (USD MM)

Net Profit

Lowest at USD 199.78 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (USD MM)

EPS

Lowest at USD 1.01

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (USD)