On Jan 21, 2015, shares of American Water Works Company, Inc. (AWK) rose to a 52-week high of $56.59. The company’s systematic investments in infrastructure development and acquisitions coupled with its stable financial position have helped attain the mark.
In addition, its practice of paying regular dividends is commendable. The share price finally closed slightly lower at $56.56, overall up around 0.7% from previous day’s closing.
American Water Works maintains a favorable liquidity position backed by strong cash generating capacity. The company had an available credit facility of around $1.2 billion, and cash and cash equivalents of nearly $0.07 billion as of Sep 30, 2014. Operating cash flow during the first nine months of 2014 was roughly $0.84 billion, up 22% from the year-ago level. A stable financial health allows the company to follow its capital spending program.
Like its peers Connecticut Water Service Inc. (CTWS) and Aqua America Inc. (WTR), American Water Works invests substantially to improve and expand its utility systems by replacing and repairing aging infrastructure, installing new facilities and acquiring assets.
American Water Works invested around $0.66 billion during the first nine months of 2014 as capital expenditure and plans to spend a total of $6 billion between 2015 and 2019. Through these initiatives, the company aims to provide reliable services to its customers and maintain public safety, besides strengthening its footprint in the U.S.
American Water Works is also keen on maximizing shareholder wealth through payment of dividends at regular intervals. In the first nine months of 2014, the company paid around $0.16 billion as dividend, up 61.6% from prior-year payout.
Several units of American Water Works recently filed rate hike requests with their respective commissions. Positive outcome from these rate cases will allow the company to recoup previous investments from its customers and encourage its infrastructure development ventures, going forward.
American Water Works currently has a Zacks Rank #3 (Hold). A better-ranked stock in the industry is American States Water Company (AWR), sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment