#4 - American Water Works Company (NYSE:AWK)
American Water Works Company (NYSE: AWK) - Utility stocks are notoriously affected by rising interest rates. But that shouldn't be the sole reason for investors to be cautious about American Water Works. The larger problem for the company is a Return on Equity (ROE) that was less than 20%, putting it below the industry average. Since return on equity is a measure of how efficiently a company is using their assets, it's fair to say that AWK has not been using its assets as efficiently as the industry average in the past year. However, that continues a trend that is also reflected by return on capital employed figure that has not improved since 2016. AWK's year-over-year earnings growth has been positive over the past five years. But in the past year, they have reported negative earnings growth. Other factors that may weigh on the stock include balance sheet and debt concerns. In the next year, AWK’s commitments exceed their cash holdings and other assets and the company’s debt level compared to net worth of 145.8% is greater than 40% and has increased from 126.4% five years ago. Operating cash flow is less than 20% of their total debt.
About American Water Works
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 3.5 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.
Read More - Current Price
- $133.84
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $141.33 (5.6% Upside)
