Yahoo Finance American Water (AWK) Tennessee Unit Upgrades Infrastructure
American Water Works AWK announced that its unit Tennessee American Water continues to make systematic investments in upgrading and maintaining its water infrastructure. In 2021, this unit invested $25 million in infrastructure upgrade work in Tennessee. Since 2013, Tennessee American Water has invested more than $150 million in infrastructure improvements.
Tennessee American Water will continue to make investments in infrastructure upgrades in 2022 as well to efficiently serve 380,000 customers. American Water Works has plans to invest $13-$14 billion in the 2022-2026 time period and $28-$32 billion in the 2022-2031 time frame.
Since the U.S. water and wastewater infrastructure is aging, a huge amount of investment will be needed for its renewal and maintenance. Per U.S. Environmental Protection Agency (“EPA”), an estimated $744-billion investment is necessary to maintain and expand the drinking water and wastewater service to meet demand over the next 20 years.
Investment Essential in Water Space
Per the findings of the American Society of Civil Engineers (“ASCE”), water main breaks occur every two minutes in the United States due to the aging of the existing water infrastructure. Per the ASCE finding, 2.1 trillion gallons of treated water is lost every year in the United States due to the delay in essential pipeline repairs and maintenance.
To upgrade the aging infrastructure, the American Jobs Plan has provisions for $111 billion in water and wastewater infrastructure upgrades. Government funding and investments from the water utilities operating in the United States are being used for upgrading the infrastructure.
U.S. water utilities like Essential Utilities WTRG and California Water Service Group CWT, among others, have been making the necessary investments to upgrade infrastructure.
WTRG has plans to invest $3 billion from 2021 through 2023 to fortify operations and efficiently serve the expanding customer base. Essential Utilities’ long-term (three to five years) earnings growth is pegged at 6.22%
CWT reaffirmed 2021 capex estimates within $270-$300 million. Also, the midpoint of CWT’s capital expenditure planned for 2022, 2023, and 2024 is $355 million, $360 million, and $365 million, respectively. The Zacks Consensus Estimate for 2022 earnings California Water Service has moved up 7.6% in the past 90 days.
Price Performance
Shares of American Water have outperformed the industry in the past six months.
Image Source: Zacks Investment Research
Zacks Rank & Key Pick
American Water Works currently has a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is Artesian Resources ARTNA, having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Artesian Resources delivered an earnings surprise of 8% in the last reported quarter. The Zacks Consensus Estimate for 2022 earnings has moved up 2.3% in the past 60 days. The dividend yield of ARTNA is 2.3%.
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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
California Water Service Group (CWT) : Free Stock Analysis Report
Artesian Resources Corporation (ARTNA) : Free Stock Analysis Report
Essential Utilities Inc. (WTRG) : Free Stock Analysis Report
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