On Dec 29, 2015, shares of American Water Works Company, Inc. AWK hit a 52-week high of $61.20, finally closing a tad lower at $60.60. The average daily volume over the last three months touched 896,160 shares. The company reported third-quarter results with a positive earnings surprise of 3.23%. In fact, the company has beaten earnings estimates in all of the last four quarters, with an average beat of 3.5%.
On Dec 14, American Water Works announced its earnings guidance for 2016 in the range of $2.75 to $2.85 per diluted share, higher than the 2015 guidance of $2.60 to $2.65 per diluted share. The upbeat projection speaks of the company’s continuous success in achieving its strategic goals.
American Water Works has recorded a year-to-date return of 12.3% thanks to management’s ability to grow its business and create value for its shareholders. The long-term earnings growth is pegged at 7.54%. Growth in earnings per share, along with a rising dividend, makes this stock an attractive choice for investors.
Earlier this month, the company further expanded its operations by acquiring Hickory Hills water and sewer systems, through its unit Missouri American Water. This acquisition will add 48 customers to Missouri American Water’s customer base. The company has completed seven acquisitions year to date.
American Water Works manages more than 370 water systems throughout the country and has plans to invest $6.4 billion in the 2016 to 2020 time frame out of which $5.5 billion will be invested in regulated operations. Regulated business investment will help American Water Works to meet its earnings per share growth target of 7% to 10% from 2016 to 2020.
American Water Works currently carries a Zacks Rank #2 (Buy). Some of the other favorably ranked stocks in the industry include Artesian Resources Corp. ARTNA, The York Water Company YORW and Veolia Environnement S.A. VEOEY, all three carrying the same Zacks Rank as American Water Works.
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