Is American Water Stock a Good Investment?
American Water Investment Advice | AWK |
- Examine American Water's financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research American Water's leadership team and their track record. Good management can help American Water navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Water Utilities space and any emerging trends that could impact American Water's business and its evolving consumer preferences.
- Compare American Water's performance and market position to its competitors. Analyze how American Water is positioned in terms of product offerings, innovation, and market share.
- Check if American Water pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about American Water's stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in American Water Works stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if American Water Works is a good investment.
Sell | Buy |
Cautious Hold
Market Performance | Very Weak | Details | |
Volatility | Very steady | Details | |
Hype Condition | Stale | Details | |
Current Valuation | Fairly Valued | Details | |
Odds Of Distress | Below Average | Details | |
Economic Sensitivity | Barely shadows the market | Details | |
Investor Sentiment | Alarmed | Details | |
Analyst Consensus | Hold | Details | |
Financial Strenth (F Score) | Healthy | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Unlikely Manipulator | Details |
Examine American Water Stock
Researching American Water's stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 94.0% of the company shares are held by institutions such as insurance companies. The book value of American Water was presently reported as 53.17. The company recorded earning per share (EPS) of 5.04. American Water Works last dividend was issued on the 12th of November 2024. The entity had 2:1 split on the 26th of July 1996.
To determine if American Water is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding American Water's research are outlined below:
| American Water Works generated a negative expected return over the last 90 days | |
| American Water Works has 12.44 B in debt with debt to equity (D/E) ratio of 1.55, which is OK given its current industry classification. American Water Works has a current ratio of 0.58, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Note however, debt could still be an excellent tool for American to invest in growth at high rates of return. | |
| Over 94.0% of American Water shares are held by institutions such as insurance companies | |
| Latest headline from gurufocus.com: California American Water Provides Tips for Identifying Scammers on Utility Scam Awareness Day |
American Water Quarterly Good Will |
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American Water uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in American Water Works. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to American Water's previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
| 14th of February 2024 Upcoming Quarterly Report | View | |
| 24th of April 2024 Next Financial Report | View | |
| 31st of December 2023 Next Fiscal Quarter End | View | |
| 14th of February 2024 Next Fiscal Year End | View | |
| 30th of September 2023 Last Quarter Report | View | |
| 31st of December 2022 Last Financial Announcement | View |
Earnings surprises can significantly impact American Water's stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises American Water's investors have experienced.
| Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
|---|---|---|---|---|---|---|---|
2010-03-01 | 2009-12-31 | 0.24 | 0.21 | -0.03 | 12 | ||
2009-02-25 | 2008-12-31 | 0.26 | 0.23 | -0.03 | 11 | ||
2009-05-05 | 2009-03-31 | 0.15 | 0.19 | 0.04 | 26 | ||
2014-05-07 | 2014-03-31 | 0.34 | 0.4 | 0.06 | 17 | ||
2010-08-04 | 2010-06-30 | 0.36 | 0.42 | 0.06 | 16 | ||
2008-08-11 | 2008-06-30 | 0.35 | 0.28 | -0.07 | 20 | ||
2024-02-14 | 2023-12-31 | 0.83 | 0.92 | 0.09 | 10 | ||
2022-04-27 | 2022-03-31 | 0.77 | 0.87 | 0.1 | 12 |
Know American Water's Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as American Water is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading American Water Works backward and forwards among themselves. American Water's institutional investor refers to the entity that pools money to purchase American Water's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
| Shares | Northern Trust Corp | 2024-09-30 | 3 M | Bank Of America Corp | 2024-06-30 | 3 M | Ubs Asset Mgmt Americas Inc | 2024-09-30 | 2.7 M | Norges Bank | 2024-06-30 | 2.4 M | Nordea Investment Mgmt Bank Demark A/s | 2024-09-30 | 2.3 M | Royal Bank Of Canada | 2024-06-30 | 2.2 M | Goldman Sachs Group Inc | 2024-06-30 | 2.2 M | Allspring Global Investments Holdings, Llc | 2024-06-30 | 2.1 M | Ameriprise Financial Inc | 2024-06-30 | 1.8 M | Vanguard Group Inc | 2024-09-30 | 24.9 M | Blackrock Inc | 2024-06-30 | 18.5 M |
American Water's market capitalization trends
The company currently falls under 'Large-Cap' category with a total capitalization of 26.87 B.Market Cap |
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American Water's profitablity analysis
| Last Reported | Projected for Next Year | ||
| Return On Tangible Assets | 0.03 | 0.02 | |
| Return On Capital Employed | 0.05 | 0.04 | |
| Return On Assets | 0.03 | 0.02 | |
| Return On Equity | 0.10 | 0.09 |
Determining American Water's profitability involves analyzing its financial statements and using various financial metrics to determine if American Water is a good buy. For example, gross profit margin measures American Water's profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of American Water's profitability and make more informed investment decisions.
American Water's Earnings Breakdown by Geography
Evaluate American Water's management efficiency
American Water Works has Return on Asset of 0.0334 % which means that on every $100 spent on assets, it made $0.0334 of profit. This is way below average. In the same way, it shows a return on shareholders' equity (ROE) of 0.097 %, implying that it generated $0.097 on every 100 dollars invested. American Water's management efficiency ratios could be used to measure how well American Water manages its routine affairs as well as how well it operates its assets and liabilities. The value of Return On Tangible Assets is estimated to slide to 0.02. The value of Return On Capital Employed is expected to slide to 0.04. At this time, American Water's Liabilities And Stockholders Equity is quite stable compared to the past year. Non Current Liabilities Total is expected to rise to about 19.3 B this year, although the value of Total Current Liabilities will most likely fall to about 1.2 B.| Last Reported | Projected for Next Year | ||
| Book Value Per Share | 50.76 | 48.22 | |
| Tangible Book Value Per Share | 44.84 | 42.60 | |
| Enterprise Value Over EBITDA | 15.93 | 15.13 | |
| Price Book Value Ratio | 2.60 | 1.62 | |
| Enterprise Value Multiple | 15.93 | 15.13 | |
| Price Fair Value | 2.60 | 1.62 | |
| Enterprise Value | 3.1 B | 2 B |
Effective management at American Water has been a driving force behind its market achievements. We assess the correlation between management practices and financial success to determine the stock's value.
Dividend Yield 0.0221 | Forward Dividend Yield 0.0221 | Forward Dividend Rate 3.06 | Beta 0.698 |
Basic technical analysis of American Stock
As of the 21st of November, American Water shows the risk adjusted performance of (0.01), and Mean Deviation of 0.9064. American Water Works technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices.American Water's insider trading activities
Some recent studies suggest that insider trading raises the cost of capital for securities issuers and decreases overall economic growth. Trading by specific American Water insiders, such as employees or executives, is commonly permitted as long as it does not rely on American Water's material information that is not in the public domain. Local jurisdictions usually require such trading to be reported in order to monitor insider transactions. In many U.S. states, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. In these cases American Water insiders are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.
Julia Johnson over three months ago Acquisition by Julia Johnson of 1035 shares of American Water subject to Rule 16b-3 | ||
Havanec Laurie P. over three months ago Disposition of tradable shares by Havanec Laurie P. of American Water subject to Rule 16b-3 | ||
Melissa Wikle over six months ago Payment of 168 shares by Melissa Wikle of American Water subject to Rule 16b-3 | ||
Loyd Warnock over a year ago Acquisition by Loyd Warnock of 1053 shares of American Water subject to Rule 16b-3 |
American Water's Outstanding Corporate Bonds
American Water issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. American Water Works uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most American bonds can be classified according to their maturity, which is the date when American Water Works has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
| US03040WAP05 Corp BondUS03040WAP05 | View | |
| US03040WAM73 Corp BondUS03040WAM73 | View | |
| AMERICAN WTR CAP Corp BondUS03040WAN56 | View | |
| AMERICAN WTR CAP Corp BondUS03040WAL90 | View | |
| US03040WAJ45 Corp BondUS03040WAJ45 | View | |
| AMERICAN WTR CAP Corp BondUS03040WAD74 | View | |
| AWK 445 01 JUN 32 Corp BondUS03040WBA27 | View | |
| AWK 325 01 JUN 51 Corp BondUS03040WAZ86 | View |
Understand American Water's technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing American Water's various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
| Risk Adjusted Performance | (0.01) | |||
| Market Risk Adjusted Performance | (16.57) | |||
| Mean Deviation | 0.9064 | |||
| Coefficient Of Variation | (5,409) | |||
| Standard Deviation | 1.16 | |||
| Variance | 1.35 | |||
| Information Ratio | (0.10) | |||
| Jensen Alpha | (0.03) | |||
| Total Risk Alpha | (0.16) | |||
| Treynor Ratio | (16.58) | |||
| Maximum Drawdown | 5.42 | |||
| Value At Risk | (1.70) | |||
| Potential Upside | 1.78 | |||
| Skewness | (0.53) | |||
| Kurtosis | 0.9162 |
| Risk Adjusted Performance | (0.01) | |||
| Market Risk Adjusted Performance | (16.57) | |||
| Mean Deviation | 0.9064 | |||
| Coefficient Of Variation | (5,409) | |||
| Standard Deviation | 1.16 | |||
| Variance | 1.35 | |||
| Information Ratio | (0.10) | |||
| Jensen Alpha | (0.03) | |||
| Total Risk Alpha | (0.16) | |||
| Treynor Ratio | (16.58) | |||
| Maximum Drawdown | 5.42 | |||
| Value At Risk | (1.70) | |||
| Potential Upside | 1.78 | |||
| Skewness | (0.53) | |||
| Kurtosis | 0.9162 |
Consider American Water's intraday indicators
American Water intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of American Water stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
American Water Corporate Filings
8K | 12th of November 2024 Report filed with the SEC to announce major events that shareholders should know about | ViewVerify |
F3 | 5th of November 2024 The report used by insiders such as officers, directors, and major shareholders (beneficial owners holding more than 10% of any class of the company's equity securities) to declare their ownership of a company's stock | ViewVerify |
10Q | 30th of October 2024 Quarterly performance report mandated by Securities and Exchange Commission (SEC), to be filed by publicly traded corporations | ViewVerify |
F4 | 2nd of August 2024 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
American Stock media impact
Far too much social signal, news, headlines, and media speculation about American Water that are available to investors today. That information is available publicly through American media outlets and privately through word of mouth or via American internal channels. However, regardless of the origin, that massive amount of American data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of American Water news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of American Water relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to American Water's headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive American Water alpha.
American Water Sentiment by Major News Outlets
Investor sentiment, mood or attitude towards American Water can have a significant impact on its stock price or the market as a whole. This sentiment can be positive or negative, and various factors, such as economic indicators, news events, or market trends, can influence it. When investor sentiment is positive, investors are more likely to buy stocks, increasing demand and increasing the stock price. Positive investor sentiment can be driven by good news about the company or the broader market, such as solid earnings reports or positive economic data.
Note that negative investor sentiment can cause investors to sell stocks, leading to a decrease in demand and a drop in the stock price. Negative sentiment can be driven by factors such as poor earnings reports, negative news about the company or industry, or broader economic concerns. It's important to note that investor sentiment is just one of many factors that can affect stock prices. Other factors, such as company performance, industry trends, and global economic conditions, can also play a significant role in determining the value of a stock.
American Water Works Historical Investor Sentiment
Investor biases related to American Water's public news can be used to forecast risks associated with an investment in American. The trend in average sentiment can be used to explain how an investor holding American can time the market purely based on public headlines and social activities around American Water Works. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
American Water's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for American Water and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average American Water news discussions. The higher the estimate score, the more favorable the investor's outlook on American Water.
American Water Corporate Directors
| Kimberly Harris | Independent Director | Profile | |
| Julia Johnson | Independent Director | Profile | |
| Jeffrey Edwards | Independent Director | Profile | |
| James Stavridis | Independent Director | Profile |
Already Invested in American Water Works?
The danger of trading American Water Works is mainly related to its market volatility and Company specific events. As an investor, you must understand the concept of risk-adjusted return before you start trading. The most common way to measure the risk of American Water is by using the Sharpe ratio. The ratio expresses how much excess return you acquire for the extra volatility you endure for holding a more risker asset than American Water. The Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. To understand how volatile American Water Works is, you must compare it to a benchmark. Traditionally, the risk-free rate of return is the rate of return on the shortest-dated U.S. Treasury, such as a 3-year bond.
When determining whether American Water Works is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if American Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about American Water Works Stock. Highlighted below are key reports to facilitate an investment decision about American Water Works Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in American Water Works. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in housing. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Is Water Utilities space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of American Water. If investors know American will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about American Water listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.084 | Dividend Share 2.945 | Earnings Share 5.04 | Revenue Per Share 23.124 | Quarterly Revenue Growth 0.134 |
The market value of American Water Works is measured differently than its book value, which is the value of American that is recorded on the company's balance sheet. Investors also form their own opinion of American Water's value that differs from its market value or its book value, called intrinsic value, which is American Water's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because American Water's market value can be influenced by many factors that don't directly affect American Water's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
In summary, please note that there is a difference between American Water's value and its price, as these two are different measures arrived at by various means. Investors typically determine if American Water is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Water's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.