American Water Works (AWK)
Key Statistics
EV/EBIT = 22x
ROE = 10.42%
Debt/Equity = 124%
FCF Yield = 4.2%
Dividend Yield = 2.26%
Market Capitalization = $24.4 billion
The Company
American Water Works (AWK) is the largest publicly traded water utility in the United States. The company operates in 24 states and provides essential water services to over 14 million people.
American Water's customer base encompasses many different entities relying on the company for water or wastewater services. From homes and apartment buildings to businesses, government organizations, and utilities, American Water is a critical utility.
The company charges most customers based on usage, and billing is monthly. Various methods, from manual reading of mechanical meters to advanced electronic meters with wireless data transmission capabilities, ensure accurate measurement and billing. Wastewater services vary from a fixed rate in some states to a usage-based billing system.
Stringent regulations govern the company's operations, with authorities closely monitoring prices. Compliance with federal, state, and local regulations concerning environmental, health, safety, and water quality matters is imperative for the company.
American Water's Regulated Businesses are the core of its operations, constituting an extensive portfolio of water and wastewater solutions. This sector encompasses an impressive array of assets, including 80 surface water treatment plants, 490 groundwater treatment plants, 175 wastewater treatment plants, and extensive transmission, distribution, and collection mains spanning over 53,500 miles.
The infrastructure includes 1,100 groundwater wells, 1,700 water and wastewater pumping stations, 1,100 treated water storage facilities, and 73 dams.
Geographically, American Water is focused on 5 key states. New Jersey, Pennsylvania, Missouri, Illinois, and California collectively account for 78% of the company's total revenue.