Reasons to Add American Water Works Stock to Your Portfolio Now

Core Viewpoint - American Water Works Company, Inc. (AWK) is positioned as a strong investment option in the utility sector due to strategic capital investments aimed at enhancing infrastructure and reliability, alongside rising earnings estimates [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for AWK's earnings per share (EPS) for 2024 and 2025 has increased by 0.6% and 0.2% respectively over the past 60 days [2] - The consensus estimates for sales in 2024 and 2025 are projected at $4.42 billion and $4.55 billion, reflecting year-over-year growth of 4.3% and 3.1% respectively [2] - AWK's long-term earnings growth rate is estimated at 8%, with an average earnings surprise of 1.1% over the last four quarters [2] Financial Health - AWK's total debt to capital ratio stands at 56.4%, which is better than the sector average of 57.9% [3] - The company's time-to-interest earned ratio was 3.5 at the end of Q2, indicating a strong ability to meet future interest obligations [3] Expansion Strategy - In the first half of 2024, AWK completed five acquisitions, adding 33,400 new customers, with 22 pending acquisitions expected to add another 59,000 customers [4] - AWK's organic operations, including extensive infrastructure, contribute significantly to its earnings [4] Long-term Investments - AWK invested $1.4 billion in upgrades and acquisitions in the first half of 2024 and plans to invest $3.1 billion throughout the year [5] - The company aims to invest $16-$17 billion from 2024 to 2028 and $34-$38 billion from 2024 to 2033, with 69% of the 2024-2033 expenditure focused on infrastructure strengthening [5] Dividend Information - AWK has a current dividend yield of 2.09%, surpassing the S&P 500 composite average of 1.5% [6] - The company anticipates a long-term increase in its dividend per share in the range of 7-9%, pending board approval [6] Share Performance - AWK shares have increased by 23.2% over the past six months, outperforming the industry growth of 17% [7]