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American Water Unit to Invest $1.6M in Pipeline Replacement
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American Water Works Company (AWK - Free Report) announced that its subsidiary, New Jersey American Water, has decided to install nearly $1.6 million of new water mains in Stuyvesant Avenue from Chestnut Street to Vauxhall Road in Union.
The company aims to replace 5,600 feet of aged pipelines with ductile iron pipes.
Objective of the Investment
All major water utilities need to make regular investments in the replacement of old and worn-out pipelines. An Environment Protection Agency (EPA) report projects capital investment of $384.2 billion in upgrading drinking water lines and $298.2 billion in changing wastewater lines during 2011 to 2030 time period.
In 2016, American Water Works aims to spend $1.4–$1.5 billion for improving its water and wastewater systems and the ongoing investments by its subsidiaries are part of its long-term plans of upgrading and replacing old pipelines. Last month, New Jersey American Water announced various plans to invest a total of nearly $17.4 million in pipeline replacement and upgradation of the existing system.
Similarly, other water and wastewater service providers are investing regularly to upgrade the existing systems. Aqua America Inc. has plans to make capital investments of over $350 million in 2016 as part of an ambitious investment target of over $1.1 billion in the 2016–2018 period. On the other hand, Connecticut Water Service Inc. aims to invest more than $150 million in the 2017–2019 time frame to strengthen its existing water infrastructure.
Price Movement
Over the last one year, American Water Works has been underperforming the Zacks Categorized Utility-Water Supply industry. Over the last one year, the company’s shares have returned 24.2%, compared with the industry’s return of 26.4%.
The company outperformed the industry up to Sep 2016, after which its performance deteriorated. In case of an interest rate hike in the near term, American Water Works’ cost of capital would rise. In addition, its current ratio of 0.42 could make it difficult for the company to qualify for a loan at favorable terms.
SJW’s earnings surpassed the Zacks Consensus Estimate by 104.4% in the last reported quarter. Moreover, its 2016 estimates improved 20.7% in the last 60 days to $2.27.
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Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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American Water Unit to Invest $1.6M in Pipeline Replacement
American Water Works Company (AWK - Free Report) announced that its subsidiary, New Jersey American Water, has decided to install nearly $1.6 million of new water mains in Stuyvesant Avenue from Chestnut Street to Vauxhall Road in Union.
The company aims to replace 5,600 feet of aged pipelines with ductile iron pipes.
Objective of the Investment
All major water utilities need to make regular investments in the replacement of old and worn-out pipelines. An Environment Protection Agency (EPA) report projects capital investment of $384.2 billion in upgrading drinking water lines and $298.2 billion in changing wastewater lines during 2011 to 2030 time period.
In 2016, American Water Works aims to spend $1.4–$1.5 billion for improving its water and wastewater systems and the ongoing investments by its subsidiaries are part of its long-term plans of upgrading and replacing old pipelines. Last month, New Jersey American Water announced various plans to invest a total of nearly $17.4 million in pipeline replacement and upgradation of the existing system.
Similarly, other water and wastewater service providers are investing regularly to upgrade the existing systems. Aqua America Inc. has plans to make capital investments of over $350 million in 2016 as part of an ambitious investment target of over $1.1 billion in the 2016–2018 period. On the other hand, Connecticut Water Service Inc. aims to invest more than $150 million in the 2017–2019 time frame to strengthen its existing water infrastructure.
Price Movement
Over the last one year, American Water Works has been underperforming the Zacks Categorized Utility-Water Supply industry. Over the last one year, the company’s shares have returned 24.2%, compared with the industry’s return of 26.4%.
The company outperformed the industry up to Sep 2016, after which its performance deteriorated. In case of an interest rate hike in the near term, American Water Works’ cost of capital would rise. In addition, its current ratio of 0.42 could make it difficult for the company to qualify for a loan at favorable terms.
Zacks Rank & a Key Pick
American Water Works currently has a Zacks Rank #3 (Hold). A better-ranked stock in the same space is SJW Group (SJW - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SJW’s earnings surpassed the Zacks Consensus Estimate by 104.4% in the last reported quarter. Moreover, its 2016 estimates improved 20.7% in the last 60 days to $2.27.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>