Reasons to Add American Water Works Stock to Your Portfolio Right Now

Core Viewpoint - American Water Works (AWK) is positioned as a strong investment option in the utility sector due to its organic growth, strategic acquisitions, and consistent returns from military contracts [1] Growth Projections - The Zacks Consensus Estimate for AWK's 2025 earnings per share (EPS) is $5.71, reflecting a year-over-year increase of 5.9% [2] - The sales estimate for 2025 is $4.85 billion, indicating a year-over-year increase of 3.6% [2] - AWK's long-term earnings growth rate is projected at 7.4%, with a trailing four-quarter average earnings surprise of 0.8% [2] Debt Position - AWK's total debt to capital ratio stands at 56.05%, which is better than the sector average of 59.23% [3] - The time-to-interest earned ratio is 3.6, indicating the company's strong ability to meet future interest obligations [3] Return on Equity - AWK's return on equity (ROE) is 10.35%, surpassing the sector average of 9.98%, demonstrating efficient capital utilization [4] Dividend History - The company has a consistent history of increasing dividends, with an annual dividend of $3.31 per share and a current dividend yield of 2.35%, outperforming the S&P 500 average of 1.24% [5] Strategic Acquisitions - AWK expanded its customer base through 13 acquisitions in 2024, adding 69,500 customers, with 18 more pending acquisitions expected to add another 37,400 customers [6][8] - The company focuses on acquiring utilities that serve between 5,000 to 50,000 customers [7] Share Price Performance - Year-to-date, AWK's stock has returned 13.4%, compared to the sector's growth of 6.3% [9]