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Fundamental analysis: American Water Works Company, Inc. (AWK)

Awarener score: 5.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Lacking), the business stability (Superb) and growth (Poor), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

  • Business has been shrinking. It's been weak when measured against peer companies.
  • American Water Works Company, Inc. business trend is extremely stable, which is best. It looks top-notch against rivals.

Margins score: 8.8

  • AWK profit margins -on goods and services sold- are usually very good. They stand somewhat worse than rival companies.
  • Business profit on sales tends to be huge. It's more than average in relation to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain a slight improvement compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still slightly worse than similar companies.
  • Profits -before income taxes- are usually excellent considering total sales, and remain more than average in relation to rivals.
  • Total net profit tends to be excellent when confronted to sales. Company stands similar to comparable firms.

Growth score: 6.0

  • American Water Works Company, Inc. profit -on goods and services sold- has been shrinking. It's been in a weak position compared to competitors.
  • In recent years, earnings growth -on operations- have been almost stagnant, which has been worse than most comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very good pace, which compares encouraging in relation to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at an excellent tempo. It turns to be excellent in relation to similar stocks.
  • In past years, profits -before income taxes- grew at a normal speed. It was well ranked against rivals.
  • In the previous years, growth trend on total net profit has been good, and great when measured against peer companies.
  • Earnings per share have grown at a good rhythm in past years. It's been excellent in relation to industry peers.

Miscellaneous score: 3.0

  • AWK had to pay a lot of income taxes in relation to profits made in the past years. It's been worse than most peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.8

  • American Water Works Company, Inc. usually gets good returns on the resources it controls. It proves almost average when measured against peer firms.
  • The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain in a weak position compared to similar companies.
  • There's usually abundant profitability -in relation to owned resources-. It ranks more than average in relation to competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 4.6

  • AWK usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands below average when measured against rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is weak when measured against industry peers.
  • In the past twelve months it paid somewhat low dividends, considering the current stock price. It came mediocre against competitors.
  • In recent years, has slightly cut back dividend payments. The company has behaved excellent in relation to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
  • The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands a disappointment compared to rivals.
  • We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 4.7

  • American Water Works Company, Inc. intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
  • The company has lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
  • A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains worse than most rival firms.
  • Most controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks weak when measured against rivals.
  • For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is worse than most similar enterprises.
  • Usually, sales are on a month credit. It still ranks similar to peers.
  • Normally has approximately somewhat less than one month of sales worth in inventory. It comes up as in good shape compared to competitors.
  • On average, it takes less than three months from the purchase to charging customers. It happens to be slightly better than peers.
  • On average pays suppliers longer than two months after the purchase. It ranks substantially worse when measured against industry peers.
  • The company pays its suppliers almost when charging its customers, so there's very little money invested in working capital. It's in a weak position compared to similar companies.
  • Usual business earnings are mostly consumed by net interest expenses. Creditors may be earning money by assuming risks, but stockholders not so much. Profitability must increase, lest the firm risks only working for creditors' benefit. It stands well ranked against rival firms.
  • Business earnings have usually been very low when measured against loans taken. Even significantly cutting back reinvesting in the business, it could take more than ten years to repay the obligations with current profitability. It ranks weak when measured against comparable enterprises.
  • The company didn't have revenues in the past twelve months. It must start having income to take advantage of used resources. It looks in a weak position compared to similar firms.
  • Resource exploitation is very low when yearly sales are considered, business volume must be greatly increased. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 4.5

  • American Water Works Company, Inc. looks very expensive in relation to profits and financial position. It happens to be encouraging in relation to competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could get, it reinvested in the business, which stands worse than most similar companies.
  • In the past years the company hardly generated enough genuine funds to cover up for its business needs. Business prospects should improve enough to be in a better position to reward investors. It's still below average when measured against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up a slight improvement compared to peer ventures.
  • The company is indebted, it should focus on loan repayment. It looks worse than most similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation is somewhat high. Improvement expectations are already in the stock price, which presents some risks. It ranks great when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a very large relationship. The stock price might rely more on expectations and resources controlled than on anything else. It looks lacking compared to rival firms.
  • The relation between the stock price and accounting book value is significantly high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains somewhat worse than peer firms.
  • In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be encouraging in relation to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a mediocre earnings power ability when measured against the current stock price and financial position. It's still in a very weak position compared to peer companies.

Total score: 5.6


AWK logos

Company at a glance: American Water Works Company, Inc. (AWK)

Sector, industry: Utilities, Utilities—Regulated Water

Market Cap: 28.26 billions

Revenues TTM: 3.81 billions

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 14 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, including 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. It also provides water and wastewater services on various military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. In addition, the company operates approximately 80 surface water treatment plants; 480 groundwater treatment plants; 160 wastewater treatment plants; 52,500 miles of transmission, distribution, and collection mains and pipes; 1,100 groundwater wells; 1,700 water and wastewater pumping stations; 1,300 treated water storage facilities; and 76 dams. It serves approximately 14 million people with drinking water, wastewater, and other related services in 24 states. American Water Works Company, Inc. was founded in 1886 and is headquartered in Camden, New Jersey.

Awarener score: 5.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Lacking), the business stability (Superb) and growth (Poor), and the company's inclination to return cash to the stockholders (Good).