American Water Works (NYSE: AWK) is one of 17 public companies in the “UTIL-WATER SPLY” industry, but how does it compare to its competitors? We will compare American Water Works to similar businesses based on the strength of its valuation, risk, analyst recommendations, dividends, profitability, earnings and institutional ownership.
Valuation and Earnings
This table compares American Water Works and its competitors revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|American Water Works||$3.36 billion||$426.00 million||34.40|
|American Water Works Competitors||$3.27 billion||$157.23 million||12.27|
American Water Works has higher revenue and earnings than its competitors. American Water Works is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
This table compares American Water Works and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Water Works||12.69%||10.03%||2.83%|
|American Water Works Competitors||8.25%||9.05%||2.68%|
Risk and Volatility
American Water Works has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, American Water Works’ competitors have a beta of 0.46, meaning that their average share price is 54% less volatile than the S&P 500.
Institutional and Insider Ownership
84.7% of American Water Works shares are owned by institutional investors. Comparatively, 43.1% of shares of all “UTIL-WATER SPLY” companies are owned by institutional investors. 0.3% of American Water Works shares are owned by insiders. Comparatively, 10.5% of shares of all “UTIL-WATER SPLY” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
American Water Works pays an annual dividend of $1.66 per share and has a dividend yield of 2.0%. American Water Works pays out 70.0% of its earnings in the form of a dividend. As a group, “UTIL-WATER SPLY” companies pay a dividend yield of 2.1% and pay out 55.9% of their earnings in the form of a dividend. American Water Works has raised its dividend for 9 consecutive years. American Water Works lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.
This is a breakdown of current ratings and price targets for American Water Works and its competitors, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Water Works||0||6||2||0||2.25|
|American Water Works Competitors||93||261||281||17||2.34|
American Water Works presently has a consensus price target of $89.40, indicating a potential upside of 9.67%. As a group, “UTIL-WATER SPLY” companies have a potential upside of 2.15%. Given American Water Works’ higher probable upside, research analysts clearly believe American Water Works is more favorable than its competitors.
American Water Works beats its competitors on 8 of the 15 factors compared.
American Water Works Company Profile
American Water Works Company, Inc. is a holding company for regulated and market-based subsidiaries throughout the United States and Ontario, Canada. The Company’s Regulated Businesses segment provides water and wastewater services as public utilities in 16 states in the United States as of December 31, 2016. The Market-Based Businesses consists of four segments, including Military Services Group, which conducts operation and maintenance (O&M) of water and wastewater systems for military bases; Contract Operations Group, which conducts O&M of water and wastewater facilities for municipalities and the food and beverage industry; Homeowner Services Group, which primarily provides water and sewer line protection plans for homeowners, and Keystone, which provides water services for natural gas exploration and production companies. The Company, through its subsidiary, American Water Works Service Company, Inc. provides support and operational services for its operating subsidiaries.
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