Earnings Performance - First quarter 2025 earnings per share were $1.05, an increase of 10.5% compared to $0.95 per share in the same quarter of 2024[1][4][5] - The company affirms its 2025 earnings per share guidance range of $5.65 to $5.75, which includes approximately $0.10 per share of incremental interest income[3][4] - Net income attributable to common shareholders for Q1 2025 was $205 million, compared to $185 million in Q1 2024, reflecting a year-over-year increase of 10.8%[21] Dividends - A quarterly cash dividend of $0.8275 per share was announced, representing an increase of 8.2%[4][12] Revenue and Income - The Regulated Businesses' net income for Q1 2025 was $201 million, up from $185 million in Q1 2024, with operating revenues increasing by $121 million[7][5] - Operating revenues for Q1 2025 increased to $1,142 million, up from $1,011 million in Q1 2024, representing a growth of 12.9%[21] Expenses - Operating expenses increased by $78 million in Q1 2025 compared to the same period in 2024, primarily due to higher employee-related costs and depreciation expenses[9][10] - Total operating expenses for Q1 2025 were $771 million, an increase from $685 million in Q1 2024, which is a rise of 12.6%[21] Capital Investment - The company invested $518 million in capital projects during the first three months of 2025, with a total planned investment of approximately $3.3 billion for the year[6] - The company successfully issued $800 million of 5.250% senior notes due 2035 to support its capital investment plan[11] Interest Income - Incremental interest income for Q1 2025 was $0.03 per share, compared to $0.02 per share in Q1 2024, due to an amendment to the secured seller note[5] Regulatory Matters - The company is pursuing general rate cases in three jurisdictions and has filed for an infrastructure surcharge in one jurisdiction, reflecting a total annualized revenue request of $100 million[8] - The company has been authorized additional annualized revenues of $161 million since January 1, 2025, with $138 million from general rate cases[8] Balance Sheet - The company's total assets as of March 31, 2025, were $33,156 million, compared to $32,830 million at the end of 2024, marking a growth of 1.0%[22] - Long-term debt increased to $13,318 million as of March 31, 2025, up from $12,518 million at the end of 2024, representing an increase of 6.4%[23] - Current liabilities decreased to $2,447 million as of March 31, 2025, down from $3,150 million at the end of 2024, a reduction of 22.3%[23] - Cash and cash equivalents rose to $114 million as of March 31, 2025, compared to $96 million at the end of 2024, reflecting an increase of 18.8%[22] Tax Provision - The company reported a provision for income taxes of $65 million for Q1 2025, compared to $57 million in Q1 2024, which is an increase of 14.0%[21] Regulatory Assets - Regulatory assets totaled $1,162 million as of March 31, 2025, slightly up from $1,150 million at the end of 2024, indicating a growth of 1.0%[22]

Financial Performance - Operating revenues for Q1 2025 increased to $1,142 million, up 12.9% from $1,011 million in Q1 2024[21] - Net income attributable to common shareholders for Q1 2025 was $205 million, representing a 10.8% increase from $185 million in Q1 2024[23] - Basic and diluted earnings per share for Q1 2025 were both $1.05, compared to $0.95 in Q1 2024, reflecting a 10.5% increase[21] - Comprehensive income attributable to common shareholders for Q1 2025 was $195 million, down from $203 million in Q1 2024, a decrease of 3.9%[23] - For the three months ended March 31, 2025, net income attributable to common shareholders was $205 million, compared to $185 million in 2024[125] Assets and Liabilities - Total assets as of March 31, 2025, were $33,156 million, up from $32,830 million as of December 31, 2024[20] - Long-term debt increased to $13,318 million as of March 31, 2025, compared to $12,518 million at the end of 2024, marking an increase of 6.4%[20] - Total current liabilities decreased to $2,447 million from $3,150 million at the end of 2024, a reduction of 22.3%[20] - Cash and cash equivalents increased to $157 million as of March 31, 2025, compared to $626 million at the end of Q1 2024[25] - Cash and cash equivalents decreased from $584 million in Q1 2024 to $114 million in Q1 2025, while restricted funds decreased from $42 million to $18 million[35] Capital Expenditures and Investments - Capital expenditures for Q1 2025 were $548 million, down from $609 million in Q1 2024, a decrease of 10.0%[25] - The Company plans to invest approximately $3.3 billion in growth strategies in 2025, with $518 million already invested in the first three months of 2025[158] - The Company reported a capital investment of $515 million in the Regulated Businesses for infrastructure improvements and replacements during the first quarter of 2025[160] Revenue Growth and Rate Cases - The Company expects a total of $138 million in annualized incremental revenues from general rate case authorizations effective in 2025, including $105 million from Illinois and $17 million from California[40][44] - The Virginia subsidiary's general rate case approved a $15 million annualized increase in water and wastewater revenues, driven by over $110 million in capital investments[41] - The Tennessee subsidiary received approval for a $1 million increase in annualized revenues, based on $173 million in capital investments[42] - The Missouri subsidiary's general rate case requests approximately $107 million in annualized incremental revenues, driven by $1.1 billion in capital investments[47] - The Company anticipates $23 million in annualized incremental revenues from infrastructure surcharge authorizations effective in 2025[49] Cash Flow and Financing - The Company reported net cash provided by operating activities of $331 million for Q1 2025, compared to $382 million in Q1 2024[25] - Proceeds from long-term debt for the three months ended March 31, 2025, were $810 million, a decrease from $1.391 billion in the same period of 2024[207][208] - The Company made sinking fund payments or repaid $531 million in aggregate principal amount of outstanding long-term debt during the three months ended March 31, 2025, with a weighted average interest rate of 3.41%[66] Legal and Regulatory Matters - The Company recorded a charge to earnings of $5.0 million related to a class action settlement, with an estimated maximum liability of $5 million[88] - As of March 31, 2025, the Company has accrued approximately $17 million of probable loss contingencies related to legal actions[83] - TAWC is currently engaged in a class action lawsuit with Tennessee Plaintiffs, with breach of contract claims pending[91] - The Public Service Commission of West Virginia initiated a general investigation into the water main break and natural gas outages, focusing on maintenance practices of both WVAWC and Mountaineer Gas[103] Miscellaneous - The Company is evaluating the impact of new accounting standards on its consolidated financial statements, including income tax disclosures and income statement disaggregation[32] - The effective income tax rate for the three months ended March 31, 2025, was 24.1%, an increase from 23.6% in the same period of 2024[79] - The Company has a CAMT credit carryforward of $132 million as of March 31, 2025, due to the Inflation Reduction Act of 2022[80] - The Company believes that the claims against WVAWC in the class action lawsuits are without merit and continues to defend itself vigorously[105]

Economic Outlook - The risk of a U.S. recession has increased, with estimates for a recession in 2025 or within the next year ranging from 40% to 60% according to various Wall Street firms and economists [3][4][21] - Goldman Sachs raised its one-year recession-risk probability to 45% from 35%, while JPMorgan set the odds at 60% [3][4] Stock Performance During Recessions - Defensive stocks, which typically pay dividends, are expected to perform better during economic downturns [5] - Categories of stocks that tend to hold up well include consumer staples, utilities, healthcare, and discount retailers [7][8] Historical Context - The Great Recession lasted from December 2007 to May 2009, with the S&P 500 index dropping 35.6% during this period [10] - Stocks that performed well during the Great Recession include Netflix, iShares Gold Trust ETF, J&J Snack Foods, Walmart, and McDonald's, with Netflix showing a return of 70.7% [12][15] Specific Stock Insights - Gold mining stocks and ETFs, such as Newmont and iShares Gold Trust, are seen as potential safe havens during recessions [17] - "Small indulgence stocks," like Netflix and Hershey, may see continued consumer spending even in downturns [18] - Utility stocks, such as American Water Works and NextEra Energy, have shown strong long-term performance, challenging the notion that they are merely "widow and orphan stocks" [19] Investment Strategy - Investors are advised to review their stock portfolios to enhance recession resistance while remaining invested in the market [21][22] - Long-term investors should avoid drastic changes to their portfolios, as timing the market can be challenging [23]

Core Viewpoint - American Water Works (AWK) is expected to report its first-quarter 2025 results on April 30, with a prior earnings surprise of 7.96% in the last quarter [1] Group 1: Factors Impacting Q1 Performance - The first-quarter earnings are anticipated to benefit from infrastructure improvements due to capital investments and efficient cost management strategies [2] - In 2024, AWK completed 13 acquisitions, adding 69,500 new customers, which is expected to create fresh demand and boost quarterly revenues [2] - Nearly 100% of AWK's net income is generated from regulated operations, with new rates effective in the first quarter likely contributing positively to performance [3] Group 2: Q1 Expectations - The Zacks Consensus Estimate for earnings is $1.04 per share, reflecting a year-over-year increase of 9.5% [4] - The Zacks Consensus Estimate for revenues is $1.03 billion, indicating a 1.8% increase from the previous year [4] Group 3: Earnings Prediction - The current model does not predict an earnings beat for AWK, with an Earnings ESP of 0.00% [5] - AWK holds a Zacks Rank of 2 (Buy) [6] Group 4: Comparable Stocks - Middlesex Water Company (MSEX) is expected to report an earnings beat with an Earnings ESP of +9.09% and a Zacks Rank 1 [7] - Evergy (EVRG) is also likely to report an earnings beat with an Earnings ESP of +5.7% and a Zacks Rank 3 [8] - Essential Utilities (WTRG) is projected to have an earnings beat with an Earnings ESP of +2.08% and a Zacks Rank 3 [10]

Core Viewpoint - The U.S. stock markets are experiencing extreme volatility due to the imposition of new tariffs by the Trump administration, which has raised concerns about a potential global trade war and its impact on the U.S. economy [2][4]. Group 1: Market Overview - The baseline tariff of 10% was imposed on all imports starting April 5, 2025, with rates reaching as high as 145% for certain countries like China [2][3]. - The S&P 500 index is currently in correction territory, having declined by 8.6% year to date, and was trading close to bear market levels last week [5]. Group 2: Featured Stocks - A selection of stocks that have provided double-digit returns year to date includes American Water Works Co. Inc. (AWK), Exelon Corp. (EXC), CenterPoint Energy Inc. (CNP), The Progressive Corp. (PGR), and Brown & Brown Inc. (BRO), all carrying a Zacks Rank 2 (Buy) [6]. Group 3: American Water Works Co. Inc. (AWK) - AWK is benefiting from contributions from acquired assets and military contracts, with new water and wastewater rates enhancing performance [7]. - The company is expanding its operations through both organic and inorganic initiatives, with 17 pending acquisitions expected to add 24,200 customers [9]. - AWK has projected revenue and earnings growth rates of 1.6% and 6.1%, respectively, for the current year, with a recent 0.2% improvement in the earnings consensus estimate [10]. Group 4: Exelon Corp. (EXC) - Exelon's investments are aimed at strengthening its transmission and distribution infrastructure, with initiatives in grid modernization expected to enhance service reliability [11]. - The company anticipates revenue and earnings growth rates of 4.2% and 6.4%, respectively, for the current year, with a 0.8% improvement in the earnings consensus estimate over the last 30 days [12]. Group 5: CenterPoint Energy Inc. (CNP) - CNP is positioned to benefit from increasing electricity demand driven by the electrification of transportation and investments in renewable energy [13]. - The company has an expected revenue and earnings growth rate of 3.2% and 8%, respectively, for the current year, with a 0.6% improvement in the earnings consensus estimate over the last 60 days [16]. Group 6: The Progressive Corp. (PGR) - PGR is experiencing growth due to higher premiums and a strong product portfolio, focusing on becoming a one-stop insurance destination [17]. - The expected revenue and earnings growth rates for PGR are 16.1% and 10.9%, respectively, with a 1% improvement in the earnings consensus estimate over the last seven days [18]. Group 7: Brown & Brown Inc. (BRO) - BRO's growth trajectory is supported by a compelling portfolio and strategic initiatives that enhance its capabilities and geographic reach [19]. - The company has projected revenue and earnings growth rates of 8.4% and 9.1%, respectively, for the current year, with a 0.2% improvement in the earnings consensus estimate over the last 30 days [20].

Market Overview - U.S. stock markets are experiencing extreme volatility in April due to the "Liberation Day" tariffs imposed by the Trump administration, with a baseline tariff of 10% on all imports and rates as high as 145% for certain countries like China [1][2] - The S&P 500 index is currently in correction territory, trading almost in bear market zone, with a year-to-date decline of 8.6% [3] Investment Opportunities - Despite the overall market downturn, a handful of S&P 500 stocks have provided double-digit returns year to date, with five recommended stocks carrying a favorable Zacks Rank of 2 (Buy): American Water Works Co. Inc. (AWK), Exelon Corp. (EXC), CenterPoint Energy Inc. (CNP), The Progressive Corp. (PGR), and Brown & Brown Inc. (BRO) [4] American Water Works Co. Inc. (AWK) - AWK is benefiting from contributions from acquired assets and military contracts, with new water and wastewater rates boosting performance [8] - The company is expanding operations through organic and inorganic initiatives, with 17 pending acquisitions expected to add 24,200 customers [10] - AWK has expected revenue and earnings growth rates of 1.6% and 6.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] Exelon Corp. (EXC) - Exelon's investments are aimed at strengthening its transmission and distribution infrastructure, with initiatives in grid modernization improving operational resilience [12] - The company has expected revenue and earnings growth rates of 4.2% and 6.4%, respectively, for the current year, with a 0.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [13] CenterPoint Energy Inc. (CNP) - CNP is positioned to benefit from increasing electricity demand due to the electrification of transportation and investments in renewable energy [14] - The company has expected revenue and earnings growth rates of 3.2% and 8%, respectively, for the current year, with a 0.6% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [17] The Progressive Corp. (PGR) - PGR is gaining from higher premiums and a strong product portfolio, focusing on becoming a one-stop insurance destination [18] - The company has expected revenue and earnings growth rates of 16.1% and 10.9%, respectively, for the current year, with a 1% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [19] Brown & Brown Inc. (BRO) - BRO's growth trajectory is driven by organic and inorganic initiatives, enhancing its capabilities and geographic reach [20] - The company has expected revenue and earnings growth rates of 8.4% and 9.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [22]

American Water Works' (AWK) subsidiary, New Jersey American Water, has completed its acquisition of the water system of Shrewsbury Township's Alfred Vail Mutual Association community. This purchase, which serves 265 customer connections, followed the approval of the New Jersey Department of Community Affairs and the New Jersey Board of Public Utilities. This is the second acquisition in the State of New Jersey to be completed through the Water Infrastructure Protection Act ("WIPA"). As part of the deal, New ...

Core Insights - The market has experienced volatility due to tariff discussions, impacting leading stocks negatively [1] - Targeting low-beta stocks can help investors balance their risk profiles during such volatility [1][6] - The Progressive Corp. (PGR) and American Water Works (AWK) are highlighted as potential 'defensive' additions [1][6] Company Performance - PGR shares have increased over 20% in 2025, significantly outperforming the S&P 500 [3] - PGR has consistently exceeded Zacks Consensus EPS estimates by an average of 18.5% over the last four quarters [3] - PGR currently has a Zacks Rank of 2 (Buy) with rising earnings expectations [3] - PGR offers a modest annual yield of 0.2%, appealing to investors despite not being a primary target for income-focused strategies [4] AWK Performance - AWK shares have gained 14% in 2025, contrasting with a 14% decline in the S&P 500 [5] - AWK exceeded both consensus EPS and sales expectations in its latest quarterly results [5] - The company reaffirmed its previous guidance, contributing to positive investor sentiment [5] - AWK provides a stronger income option with a current annual yield of 2.2% and an 8.8% five-year annualized dividend growth rate [5][7]

Buying and holding a stock over the long term requires conviction that the company will live up to investor expectations.For growth stocks, that can mean unlocking the potential of a paradigm-shifting technology. In contrast, investors may expect dividend-paying companies to steadily boost their earnings and payouts over time, rewarding them with a one-two punch of passive income and capital gains.Here's why Lockheed Martin (LMT -4.81%), American Water Works (AWK -3.06%), and Watsco (WSO -2.98%) stand out a ...

Group 1 - American Water Works Company, Inc. shares are currently trading higher, but there is a potential for a reversal and decline in stock price [1] - Historical data shows that the stock has previously faced resistance around the $148.00 level, leading to sell-offs after reaching this price [1][6] - Investor psychology plays a significant role in creating resistance, as many investors who bought shares at this level may place sell orders to avoid losses, contributing to the resistance [3][5][6] Group 2 - The concentration of sell orders at the $148.00 level is likely to lead to another sell-off, as seen in past occurrences when the stock reached this price [6][8] - The behavior of traders and investors, driven by fear of selling at a lower price, can create a snowball effect that further drives the stock price down [7]