Group 1: Company Developments - American Water Works (AWK) announced the acquisition of Silver Creek Water Corporation for $45 million, expected to close in mid-November, adding 8,000 water customers to its Indiana American Water unit [1] - Indiana American Water has made strategic acquisitions in 2023, including Claypool Water System and Sunset Village Water System, which added 250 water customers [1] - AWK completed five acquisitions in the first half of 2024, adding nearly 33,400 new customers, with 22 pending acquisitions expected to add another 59,000 customers [3] Group 2: Industry Trends - The U.S. water industry is fragmented, with nearly 50,000 community water systems and 16,000 wastewater treatment systems, many of which are too small to perform necessary repairs, leading to service disruptions [2] - A significant portion of U.S. water infrastructure is nearing the end of its effective service life, necessitating investments for upgrades, prompting large water utility companies to acquire smaller players [2] - California Water Service Group (CWT) is also pursuing strategic acquisitions in high-growth markets, with recent acquisitions adding 1,800 customers [4] Group 3: Market Performance - AWK shares have outperformed the industry, gaining 21.4% in the past six months compared to the industry's 17.9% growth [5]

Core Viewpoint - American Water Works Company, Inc. (AWK) is set to increase its annual revenues by approximately $79.5 million due to new water and wastewater rates approved by the New Jersey Board of Public Utilities, effective September 15, 2024, aimed at recovering over $1.3 billion in infrastructure investment costs [1][2]. Group 1: Rate Hike and Infrastructure Investment - The aging water supply system necessitates regular investments for upgrades and maintenance to ensure long-term growth, with water rate hikes supporting these strategic investments [2]. - AWK plans to invest $3.1 billion in 2024, with a total investment range of $16-$17 billion for the 2024-2028 period and $34-$38 billion for the 2024-2033 period, focusing on infrastructure improvements [3]. - The introduction of the Universal Affordability Tariff aims to provide discounts for income-eligible customers, enhancing affordability [2]. Group 2: Industry Investment Needs - The U.S. Environmental Protection Agency estimates that $625 billion is needed for drinking water and $271 billion for wastewater pipeline maintenance and expansion over the next 20 years [3]. - Other water utilities, such as SJW Group, American States Water Company, and California Water Service Group, are also planning significant capital investments to strengthen their infrastructure [3]. Group 3: Performance and Earnings - AWK shares have increased by 10.9% over the past three months, outperforming the industry growth of 9.4% [6]. - AWK currently holds a Zacks Rank 2 (Buy), indicating positive market sentiment [8].

Core Viewpoint - Wall Street is experiencing volatility due to disappointing economic data, particularly in the manufacturing sector, which has raised concerns about a slowing economy. Defensive stocks in utilities and consumer staples are recommended as safer investment options during this period of uncertainty [1][2][4]. Economic Overview - The manufacturing PMI rose slightly to 47.2 in August from 46.8 in July, indicating continued contraction as it remains below the neutral level of 50 for the fifth consecutive month [2][3]. - The manufacturing sector constitutes 10.3% of the economy, with notable contractions in industries such as machinery, textile mills, and transportation equipment [2]. Market Performance - On the first trading day of September, the Dow dropped 626.15 points (1.5%), the S&P 500 fell 2.1%, and the Nasdaq declined 3.3% [4]. - The Federal Reserve has raised interest rates to a 23-year high, which has contributed to slowing orders and output in factories [4]. Defensive Stocks Recommendations - **American Water Works Company, Inc. (AWK)**: Provides water services to over 14 million customers, with an expected earnings growth rate of 7.4% and a current dividend yield of 2.14% [7][8]. - **NiSource Inc. (NI)**: Delivers natural gas and electricity to nearly 4 million customers, with an expected earnings growth rate of 7.5% and a current dividend yield of 3.21% [10]. - **Evergy, Inc. (EVRG)**: Supplies energy to over 1.7 million customers, with an expected earnings growth rate of 8.8% and a current dividend yield of 4.35% [12]. - **Unilever PLC (UL)**: Engaged in manufacturing consumer goods, with an expected earnings growth rate of 8.2% and a current dividend yield of 2.92% [15]. - **Flowers Foods, Inc. (FLO)**: Focuses on high-quality baked goods, with an expected earnings growth rate of 4.2% and a current dividend yield of 4.13% [17].

Group 1: Inflation Context - Inflation in the United States remains high, above the Federal Reserve's target of below 2%, despite signs of cooling [1] - Investors are seeking assets that can provide protection against inflation [1] Group 2: W.P. Carey (NYSE: WPC) - W.P. Carey is a real estate investment trust (REIT) with a diversified portfolio, including industrial, office, retail, and warehouse properties [2] - Many of its leases are linked to inflation, ensuring a sustainable revenue stream [2] - The company reported a revenue decline to $389.7 million for Q2 2024, down 13.9% from $452.6 million in Q2 2023 [3] - The stock gained almost 8% over the past month but is down over 8% year-to-date, trading at $60 [3] Group 3: American Water Works (NYSE: AWK) - American Water Works is considered an inflation-proof stock due to its focus on water utilities, which have consistent demand and minimal competition [5] - The company’s Q2 2024 revenues grew 4.7% year-over-year to $1.15 billion [6] - AWK was trading at $143, reflecting year-to-date gains of over 7% [6] Group 4: Kroger (NYSE: KR) - Kroger has strong pricing power and inelastic demand for groceries, allowing it to pass costs onto consumers during inflation [8] - The stock is viewed as undervalued due to perceptions of the grocery retail industry as low-margin and highly competitive [8] - Kroger's stock is trading at $53, having gained nearly 2% in the past week and over 16% year-to-date [8]

Core Viewpoint - American Water Works is making significant investments in infrastructure to enhance water quality and service reliability, particularly through the construction of a new groundwater treatment plant and planned capital expenditures over the coming years [1][3]. Group 1: Infrastructure Investment - American Water Works has invested $10.9 million in a new groundwater treatment plant, which is expected to provide high-quality water and mitigate flooding impacts [1][2]. - The U.S. EPA estimates that $896 billion is needed over the next 20 years to maintain and expand drinking water and wastewater services, presenting growth opportunities for water utility operators [3]. - American Water plans to invest $3.1 billion in 2024, with a total investment of $16-$17 billion from 2024-2028 and $34-$38 billion from 2024-2033 [3]. Group 2: Competitor Investments - Essential Utilities plans to invest $1.3-$1.4 billion in 2024 for over 5,000 projects and $7.2 billion from 2024-2028 to enhance water and natural gas systems [4]. - California Water Service intends to invest over $380 million in capital expenditures in 2024 [4]. - Middlesex Water plans to invest $237 million from 2024-2026 to strengthen its water and wastewater infrastructure [4]. Group 3: Dividend Yield and Performance - The current dividend yields for American Water Works and its peers are 2.14% (AWK), 3.34% (WTRG), 2.02% (CWT), and 2.06% (MSEX), all of which exceed the Zacks S&P 500 composite yield of 1.54% [4]. - Over the past six months, American Water has seen an 18.9% increase in share price, outperforming the industry growth of 15.6% [5]. Group 4: Zacks Rank - American Water currently holds a Zacks Rank of 2 (Buy), indicating positive market sentiment [7].

It has been about a month since the last earnings report for American Water Works (AWK) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is American Water Works due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. American Water’s Q2 Earning ...

These dividend stocks look like compelling buys right now.The stock market has set several new all-time highs this year. Because of that, most stocks are up sharply, which is leaving fewer bargains.However, there are a few stocks that still look like great deals. American Water Works (AWK 0.29%), Enbridge (ENB 1.59%), and Clearway Energy (CWEN 1.67%) (CWEN.A 1.65%) stand out to three Fool.com contributors right now because of their compelling investment potential. However, that might not last, which is why ...

Are you starting to get nervous about the frothy stock market and thinking about taking some profits off the table? You’re not alone. With the economy flashing warning signs and many high-flying tech names coming back down to earth, it might be time to consider shifting some of your portfolio into recession-resistant stocks.Last week was a bloodbath for many market darlings, and fear is still gripping investors. Frankly, I believe this fear is justified. Unemployment is ticking up, job growth is slowing and ...

It’s an asset and resource that we use everyday and therefore, we become desensitized to its importance. But water really is the golden ticket for the future of global societies and economies. Life on this planet cannot exist without it. And therefore, its management and stewardship are incredibly critical. By logical deduction, investors jittery about present market dynamics should consider the best water stocks to buy.Relevance doesn’t guarantee upside, let me just be clear about that point. Water-related ...

After what seemed like a slam-dunk victory for former President Donald Trump, circumstances in the political realm have become much more exciting. It’s not entirely clear that Vice President Kamala Harris can do enough to change the dynamics of the race to her favor. Still, polling data shows that she’s closing the gap to Trump. And that augurs well for stable dividend stocks.By the next few weeks, who knows? The race could look much different. Given how contentious the entire electoral environment is, one ...