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American Water (AWK) Unit to Pass on TCJA Savings to Users
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American Water Works Company (AWK - Free Report) announced that its subsidiary, Pennsylvania American Water has received directive from the Pennsylvania Public Utility Commission (PUC) to pass on the tax savings benefits resulting from the implementation of the Tax Cuts and Jobs Act (TCJA) to customers.
The new act became effective Jan 1, 2018 and lowered the corporate tax rate from 35% to 21%. This move will lead to reduction of about $47 million annually in the federal income tax that Pennsylvania American Water will pay to the government.
Quality Service at Low Prices
The tax-cut savings will allow the residential customers of Pennsylvania American Water to enjoy safe and reliable services at a very competitive price.
For water customers who typically use 5,000 gallons per month, the savings will be $5.27 or $63.24 per year, while wastewater customers, who typically use 5,000 gallons per month, will encounter savings of $6.58, or $78.96 per year.
Tax Cuts — A Blessing for Customers
Utilities in some states are directed by the utility commission for implementing tax cuts to lower customers’ bills. Utilities are passing on the benefits to their customer base either through reduction in existing utility service rates or by adjusting their planned rate increases.
Passing on tax savings does not look significant when we consider a single user or a single utility, however, it is significant when we consider the nation as a whole. Decisions have already been taken to pass on more than billions of dollars in tax savings to customers and we expect this amount to increase further.
Recently, Duke Energy Corporation (DUK - Free Report) decided to pass on $142 million in tax savings to lower utility bills of Indiana-based customers if the proposed settlement is approved by the Indiana Utility Regulatory Commission.
Another utility, NextEra Energy (NEE - Free Report) has decided to use tax savings of nearly $1.3 billion to recoup the storm-recovery expenses, without increasing its users’ bills in Florida.
Price Movement
American Water Works’ shares have returned 11.5% in the past year, outperforming the 1.7% growth of the industry it belongs to.
Global Water Resources’ long-term EPS growth is expected to be 15% and its 2018 Consensus Estimate has moved up 21.4% to 17 cents in the past 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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American Water (AWK) Unit to Pass on TCJA Savings to Users
American Water Works Company (AWK - Free Report) announced that its subsidiary, Pennsylvania American Water has received directive from the Pennsylvania Public Utility Commission (PUC) to pass on the tax savings benefits resulting from the implementation of the Tax Cuts and Jobs Act (TCJA) to customers.
The new act became effective Jan 1, 2018 and lowered the corporate tax rate from 35% to 21%. This move will lead to reduction of about $47 million annually in the federal income tax that Pennsylvania American Water will pay to the government.
Quality Service at Low Prices
The tax-cut savings will allow the residential customers of Pennsylvania American Water to enjoy safe and reliable services at a very competitive price.
For water customers who typically use 5,000 gallons per month, the savings will be $5.27 or $63.24 per year, while wastewater customers, who typically use 5,000 gallons per month, will encounter savings of $6.58, or $78.96 per year.
Tax Cuts — A Blessing for Customers
Utilities in some states are directed by the utility commission for implementing tax cuts to lower customers’ bills. Utilities are passing on the benefits to their customer base either through reduction in existing utility service rates or by adjusting their planned rate increases.
Passing on tax savings does not look significant when we consider a single user or a single utility, however, it is significant when we consider the nation as a whole. Decisions have already been taken to pass on more than billions of dollars in tax savings to customers and we expect this amount to increase further.
Recently, Duke Energy Corporation (DUK - Free Report) decided to pass on $142 million in tax savings to lower utility bills of Indiana-based customers if the proposed settlement is approved by the Indiana Utility Regulatory Commission.
Another utility, NextEra Energy (NEE - Free Report) has decided to use tax savings of nearly $1.3 billion to recoup the storm-recovery expenses, without increasing its users’ bills in Florida.
Price Movement
American Water Works’ shares have returned 11.5% in the past year, outperforming the 1.7% growth of the industry it belongs to.
Zacks Rank and A Stock to Consider
Currently, American Water Works has a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Global Water Resources Inc. (GWRS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Global Water Resources’ long-term EPS growth is expected to be 15% and its 2018 Consensus Estimate has moved up 21.4% to 17 cents in the past 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>