American Water Works Highly Valued Despite 18% Decline in 2022 Thanks to Federal Support and Growth Opportunities
January 7, 2023
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AWR Intrinsic Value – American States Water ($NYSE:AWR) is a publicly-traded water and wastewater holding company headquartered in San Dimas, California. The company is the largest investor-owned water utility in the United States and serves over 18 million customers across the nation. Despite a 18% decline in 2022, American Water Works remains highly valued due to long-term positives such as federal water infrastructure support and growth through acquisitions. The federal government has been increasing its support for water infrastructure projects, which is expected to benefit water utilities like American States Water for the foreseeable future. This is expected to translate into higher earnings for the company, as it continues to receive additional investments from the federal government.
Additionally, American States Water has been actively seeking to grow through acquisitions. The company has recently acquired several smaller water utilities, and by combining their operations with its own, it is able to increase its customer base and improve its profitability. In addition to these long-term positives, American States Water also has a strong financial position which provides a cushion against any potential losses. The company has been able to maintain a healthy balance sheet and manage its debt in an efficient manner, which helps to ensure that its financial position remains strong. Furthermore, American States Water has an experienced management team which is experienced in managing acquisitions and new investments, allowing it to capitalize on growth opportunities. This decline can be attributed to short-term market fluctuations, however, the company remains well-positioned to benefit from federal support and growth through acquisitions in the long run. Furthermore, its strong financial position and experienced management team provide a cushion against any potential losses, making it an attractive investment for long-term investors.
Price History
The media coverage of this news has been overwhelmingly positive, and with the announcement of the new support and opportunities for growth, it has only strengthened public opinion of American Water Works. On Wednesday, the stock for American Water Works opened at $95.7 and closed at $96.2, an increase of 1.2% from its closing price from the day before of $95.1. This increase is a sign of the confidence that investors have in the company’s ability to take advantage of the federal support and growth opportunities it has recently received. With this extra help, it is expected that the company will be able to return to its previous level of profitability much sooner than originally anticipated.
These opportunities may include pursuing new sources of capital, expanding into new markets, and increasing its presence in existing markets. With the support of investors and the public, the company is expected to make a successful recovery from its 18% decline in 2022. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for AWR. More…
| Total Revenues | Net Income | Net Margin |
| 482.79 | 79.92 | 16.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for AWR. More…
| Operations | Investing | Financing |
| 123.59 | -160.34 | 31.86 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for AWR. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.98k | 1.28k | 19.09 |
Key Ratios Snapshot
Some of the financial key ratios for AWR are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.8% | 1.0% | 27.0% |
| FCF Margin | ROE | ROA |
| -7.5% | 11.7% | 4.1% |
VI Analysis – AWR Intrinsic Value Calculator
American States Water Company (AWR) is a publicly traded utility and holding company that provides water supply, electric service, and other services to customers in the United States. The company’s fundamentals reflect its long term potential and are analyzed by the Value Investor (VI) App. According to VI Line, the intrinsic value of AMERICAN STATES WATER share is around $93.7. Currently, the stock is traded at $96.2, slightly overvalued by 3%. The company has a history of providing reliable services to its customers and has a strong balance sheet and solid cash flow. The company also has plans for growth and expansion in the near future. In conclusion, AMERICAN STATES WATER stock is a safe investment option for those looking for steady returns with minimal risk. With a fair price and attractive dividend yield, investors should consider adding this stock to their portfolio to benefit from its long-term potential. More…
VI Peers
The Company operates through two segments: Water and Electric. American States Water Company provides water and wastewater services to residential, commercial, industrial, and governmental customers in the states of California and Arizona. The Company is the largest shareholder-owned water utility in California. American States Water Company’s subsidiaries include Golden State Water Company and Arizona Water Company. SJW Group is a publicly traded water and wastewater utility company headquartered in San Jose, California. The Company operates through three segments: Water Utility Services, Real Estate Services, and Corporate and Other. SJW Group provides water and wastewater services to residential, commercial, industrial, and governmental customers in the states of California, Texas, Connecticut, and Massachusetts. American Water Works Co Inc is a publicly traded water and wastewater utility company headquartered in Voorhees, New Jersey. The Company operates through three segments: Regulated Businesses, Market-Based Operations, and Homeowner Services. American Water Works Company Inc provides water and wastewater services to residential, commercial, industrial, and governmental customers in the states of Illinois, New Jersey, Pennsylvania, Virginia, West Virginia, Kentucky, Ohio, Michigan, Indiana, North Carolina, South Carolina, Maryland, Delaware, Florida, Louisiana, Georgia, Colorado, Nevada, New Mexico, Oklahoma, Texas, and Wyoming. Global Water Resources Inc is a publicly traded water and wastewater utility company headquartered in Scottsdale, Arizona. The Company operates through two segments: Regulated Operations and Non-Regulated Operations. Global Water Resources Inc provides water and wastewater services to residential, commercial, industrial, and governmental customers in the state of Arizona.
– SJW Group ($NYSE:SJW)
SJW Group is a publicly traded water and wastewater utility company headquartered in San Jose, California. It is the holding company for San Jose Water Company, SJWTX, Inc., and SJW Land Company. As of 2019, SJW Group served more than one million people in San Jose, California; Austin, Texas; and Connecticut.
The company has a market cap of 1.88B as of 2022 and a Return on Equity of 7.1%. SJW Group’s market cap is the fourth highest of all water and wastewater utilities in the United States. The company’s ROE is above the average for all water and wastewater utilities in the United States.
– American Water Works Co Inc ($NYSE:AWK)
The American Water Works Company, Inc. is the largest publicly traded U.S. water and wastewater utility company. It provides water and wastewater services to an estimated 15 million people in 47 states and Ontario, Canada. The company operates through six segments: Regulated Businesses, Market-Based Businesses, Homeowner Services, Contracted Services, Other, and Corporate & Other. The company was founded in 1886 and is headquartered in Voorhees, New Jersey.
– Global Water Resources Inc ($NASDAQ:GWRS)
As of 2022, Global Water Resources Inc has a market cap of 277.81M and a ROE of 30.2%. The company is involved in the development, ownership, and operation of water and wastewater utilities in the United States.
Summary
American States Water (AWR) has been a highly valued stock despite an 18% decline in 2022, due to the federal support and growth opportunities the company has seen. Analysts suggest that the company has a bright future given its strong fundamentals, financial stability, and positive media exposure. With its attractive valuation, strong balance sheet, and consistent dividend payments, American States Water is an attractive investment for investors seeking long-term capital appreciation.
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