We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Water Unit to Acquire Pike County Wastewater System
Read MoreHide Full Article
American Water Works Company (AWK - Free Report) announced that its unit, Pennsylvania American Water has entered into an agreement to acquire the wastewater assets of Delaware Sewer Company in Delaware Township, Pike County. This acquisition will cost $61,700 and add nearly 40 wastewater customers to its existing customer base.
Pennsylvania American Water, through its existing distribution network, serves nearly 2.4 million people in Pennsylvania. The said acquisition might seem relatively small compared to its existing customer base but additions like this help render quality services to customers at a reasonable cost.
The wastewater system of Delaware Sewer Company suffered from a lack of investment and proper maintenance. The primary reason behind the acquisition is that Pennsylvania American Water will take steps to improve the existing infrastructure, once the acquisition is complete by the third quarter of 2019, subject to regulatory approvals.
Consolidation is Essential
A recent study from Utah State University showed that overall water main break over the last 6-year period has gone up 27% in the United States and Canada. The primary reasons behind water main failure are the aging water infrastructure and higher failure rates of smaller water utilities compared with larger ones.
Since the existing water infrastructure in the United States is aging, proper maintenance and upgradation of the system will require investment of billions of dollars, which becomes difficult for small water utilities to make arrangement for.
Therefore, through the acquisition of small utilities, it becomes easier for large companies to make arrangement for funds to carry out these major overhauls. American Water Works is one of the most active players and continues to widen its market reach through acquisitions. In the first half of 2018, the company added 5,600 new customers through completed acquisitions. The pending acquisition agreement, when complete, will add nearly 57,000 customer connection to its existing customer base.
American Water Works in not the only water utility that is actively pursuing an inorganic growth strategy. We can also notice other active water utilities like Global Water Resources, Inc. (GWRS - Free Report) and Aqua America to pursue acquisitions.
Middlesex Water Company delivered an average positive earnings surprise of 6.83% in the trailing four quarters. Earnings estimates of the company have moved up 17.9% to $1.84 in the past 30 days.
Shares of both American Water Works and Middlesex Water Company have outperformed the industry in a year’s time.
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.
Image: Bigstock
American Water Unit to Acquire Pike County Wastewater System
American Water Works Company (AWK - Free Report) announced that its unit, Pennsylvania American Water has entered into an agreement to acquire the wastewater assets of Delaware Sewer Company in Delaware Township, Pike County. This acquisition will cost $61,700 and add nearly 40 wastewater customers to its existing customer base.
Pennsylvania American Water, through its existing distribution network, serves nearly 2.4 million people in Pennsylvania. The said acquisition might seem relatively small compared to its existing customer base but additions like this help render quality services to customers at a reasonable cost.
The wastewater system of Delaware Sewer Company suffered from a lack of investment and proper maintenance. The primary reason behind the acquisition is that Pennsylvania American Water will take steps to improve the existing infrastructure, once the acquisition is complete by the third quarter of 2019, subject to regulatory approvals.
Consolidation is Essential
A recent study from Utah State University showed that overall water main break over the last 6-year period has gone up 27% in the United States and Canada. The primary reasons behind water main failure are the aging water infrastructure and higher failure rates of smaller water utilities compared with larger ones.
Since the existing water infrastructure in the United States is aging, proper maintenance and upgradation of the system will require investment of billions of dollars, which becomes difficult for small water utilities to make arrangement for.
Therefore, through the acquisition of small utilities, it becomes easier for large companies to make arrangement for funds to carry out these major overhauls. American Water Works is one of the most active players and continues to widen its market reach through acquisitions. In the first half of 2018, the company added 5,600 new customers through completed acquisitions. The pending acquisition agreement, when complete, will add nearly 57,000 customer connection to its existing customer base.
American Water Works in not the only water utility that is actively pursuing an inorganic growth strategy. We can also notice other active water utilities like Global Water Resources, Inc. (GWRS - Free Report) and Aqua America to pursue acquisitions.
Zacks Rank and A Key Pick
Currently, American Water Works has a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is Middlesex Water Company (MSEX - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Middlesex Water Company delivered an average positive earnings surprise of 6.83% in the trailing four quarters. Earnings estimates of the company have moved up 17.9% to $1.84 in the past 30 days.
Shares of both American Water Works and Middlesex Water Company have outperformed the industry in a year’s time.
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>>