New Lifetime High Reached By American Water Works (AWK)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified American Water Works ( AWK) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified American Water Works as such a stock due to the following factors:

  • AWK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.4 million.
  • AWK has traded 8,275 shares today.
  • AWK is trading at a new lifetime high.

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More details on AWK:

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company's Regulated Businesses segment offers water and wastewater services to approximately 1,500 communities in 16 states. The stock currently has a dividend yield of 2.3%. AWK has a PE ratio of 24.4. Currently there are 8 analysts that rate American Water Works a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for American Water Works has been 732,000 shares per day over the past 30 days. American Water Works has a market cap of $9.6 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.55 and a short float of 1.1% with 1.53 days to cover. Shares are up 27.2% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Water Works as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for AMERICAN WATER WORKS CO INC is rather high; currently it is at 52.54%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.98% trails the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.87% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • AMERICAN WATER WORKS CO INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN WATER WORKS CO INC reported lower earnings of $2.06 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $2.06).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Water Utilities industry average. The net income increased by 1.0% when compared to the same quarter one year prior, going from $150.67 million to $152.19 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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