Relevant content in my book
For the relevant content in my book, I introduced the company American Water Works (ticker: AWK) in a special article in my book. The content in the book will not be repeated. Investors are invited to refer to my book “The Rules of 10 Baggers” Sections 3-8, 179 pages.
Introduction
A Brief Introduction
The American Water Works Company, founded in 1886, is the nation’s premier water company; its primary business is to provide drinking water, wastewater and related water services to more than 14 million people in 24 states. American Water Works is a typical public utility listed company in the United States, which must accept the supervision of governments across the United States. Provides water and wastewater services in the United States through its subsidiaries. It provides water and wastewater services to approximately 1,700 communities in 14 states, serving approximately 3.4 million active customers.
Company’s assets
It also operate approximately 80 surface water treatment plants; 480 groundwater treatment plants; 160 sewage treatment plants; 52,500 miles of transmission, distribution and collection mains and pipelines; 1,100 groundwater wells; 1,700 water and sewage pumps stations; 1,300 treated water storage facilities; and 76 dams.
Revenue break-down
Revenue resources
| State | ＄Million | % of Total revenue |
| New Jersey | 826 | 24.40% |
| Pennsylvania | 770 | 22.80% |
| Missouri | 349 | 10.30% |
| Illinois | 340 | 10.00% |
| California | 268 | 7.90% |
Revenue by type
Business performance and valuation
Business performance
| Year 2021 | NextEra Energy | American Water Works |
| Annual revenue and growth rate (million) | 17,069 -5.16% | 3,930 +4.05% |
| Annual operating income and growth rate (million) | 3,121 -39.35% | 1,274 -1.77% |
| Annual net income and growth rate (million) | 3,573 +22.4% | 1,263 +78.14% |
| Operating margin | 18.28% | 32.42% |
| Net margin | 20.93% | 32.14% |
Stock valuation
| 7/23/2022 | NextEra Energy | American Water Works |
| Market capitalization ($ billion) | 156.87 | 27.03 |
| Share price | 79.85 | 148.71 |
| P/E | 108.40 | 20.01 |
| Dividend yield | 2.13% | 1.76% |
| Stock performance in past 10 years (S&P 500 was＋232%) | +449% | +232% |
Long term investment metrics
Stock performance vs. S&P 500
| Company | Market Cap | Dividend Yield | Projected Annualized EPS Growth Over Next 5 Years | Stock’s 10-Year Total Return |
|---|---|---|---|---|
| NextEra Energy | $139 billion | 2.4% | 8.9% | 449% |
| American Water Works | $23.8 billion | 2% | 8.3% | 378% |
| S&P 500 | N/A | 1.47% | N/A | 232% |
Dividends
Among the best stocks to consider buying now are dividend-paying shares of well-established, profitable companies that sell products and services customers need during both good and challenging economic times, including during recessions. Two such companies are U.S. water and wastewater utility giant American Water Works.
American Water Works is the largest and most geographically diverse U.S. water and wastewater utility. It provides regulated utility services in 14 states and has a market-based business that provides services on military bases throughout the country.
The company was founded in 1886 and is poised to thrive well into the future. The beauty of regulated water utilities for investors is that they provide a product that is essential and has no substitutes, and they’re legal monopolies, so competition isn’t a concern.
American Water Works’ catalysts for growth include industry consolidation, the need for water system infrastructure upgrades throughout much of the country, and climate-change-induced rising temperatures.
The company has raised its dividend every year since it went public in 2008. Moreover, through 2026, management expects dividend growth to average at the high end of the 7% to 10% range.
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