American Water Works pany(AWK) ZACKS·2025-03-07 18:50Core Viewpoint - American Water Works Company Inc. (AWK) is positioned as a strong investment option in the utility sector due to rising earnings estimates, long-term investment plans, and growth opportunities [1] Earnings Projections & Growth Rate - The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased by 0.4% to 6.13, reflecting a 0.3% increase [2] - AWK's long-term earnings growth rate is projected at 8.3% over the next three to five years [3] Systematic Investments & Rate Hikes - AWK plans to invest 17-40-373 million to annual revenues in 2024, with further increases of 178 million from pending rate cases [5] Dividend History - AWK has a strong track record of increasing shareholder value through dividends, currently paying a quarterly dividend of 76.50 cents per share, equating to an annualized payout of $3.06 [7] - The company anticipates a long-term dividend increase of 7-9%, subject to board approval, with a current dividend yield of 2.22% [7] Solvency - The time-to-interest earned ratio at the end of Q4 2024 was 3.6, indicating AWK's capability to meet future interest obligations comfortably [8] Expansion Through Acquisition & Organic Initiatives - In 2023, AWK added 18,100 customers through 23 acquisitions across eight states, and in 2024, it completed 13 acquisitions, adding 69,500 customers [9] - Pending acquisitions as of January 1, 2025, are expected to add another 24,200 customers, demonstrating the company's commitment to expanding its customer base [10] Price Performance - Over the past year, AWK's stock has increased by 16.7%, outperforming the industry growth of 9.4% [11]