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American Water's (AWK) Illinois Arm Acquires Water Assets
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American Water Works Company (AWK - Free Report) announced that its subsidiary, Illinois American Water has acquired the water distribution system of Concordia Water Cooperative. This acquisition will add 150 customers to its existing customer base. Illinois American Water paid $1.7 million to acquire the distribution assets of Concordia Water Cooperative.
The acquisition not only ensures high-quality water services to customers but will also lower utility bill by $50.25 a month for customers using 3,500 gallons per month and having a 5/8 inch meter. Illinois American Water will also make the necessary investments to upgrade the acquired water distribution system and increase resilience of the system.
Illinois American Water currently provides reliable water and wastewater services to more than 1.3 million people in its service territories.
Acquisitions Essential for Water Space
Aging of assets and fragmentation are primary concerns of the existing U.S. water and wastewater industry. Per an American Water report, more than 53,000 water systems in the United States are providing water solutions to customers at present, which creates operational challenges in meeting the requirement for replacement, and modification of the aging water and wastewater infrastructure. At present, only 7% of the country’s systems serve a population of more than 10,000 and a mere 1% of the systems cater to more than 100,000 people.
Per the Water and Wastewater Equipment Manufacturers Association, an estimated $750 billion investment is necessary to maintain and expand the drinking water and wastewater service to meet demand over the next 20 years.
American Water is quite active in acquiring small service providers. Last year, the company added more than 36,000 customers to the existing customer base through acquisitions and its yet-to-be-completed deal could add another 19,000 customers to the existing customer base. In addition to consolidating, the company is making regular investments to upgrade the existing and acquired assets. It is planning to invest $8.8-$9.4 billion in the 2020-2024 time period and $20-$22 billion in the next decade to upgrade, as well as maintain its infrastructure.
Likewise, another water utility, Essential Utilities (WTRG - Free Report) has not only expanded water and wastewater operations through acquisitions but also ventured into the natural gas distribution business through the acquisition of Peoples. The company aims to invest more than $2.8 billion over the 2020-2022 time period to rehabilitate and strengthen water, as well as gas infrastructure. Other water utilities like California Water Service Group (CWT - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) are also taking the inorganic route to expand operations in the United States, as well as making investments to upgrade infrastructure.
Price Performance
Shares of American Water have outperformed the industry in the past 12 months.
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American Water's (AWK) Illinois Arm Acquires Water Assets
American Water Works Company (AWK - Free Report) announced that its subsidiary, Illinois American Water has acquired the water distribution system of Concordia Water Cooperative. This acquisition will add 150 customers to its existing customer base. Illinois American Water paid $1.7 million to acquire the distribution assets of Concordia Water Cooperative.
The acquisition not only ensures high-quality water services to customers but will also lower utility bill by $50.25 a month for customers using 3,500 gallons per month and having a 5/8 inch meter. Illinois American Water will also make the necessary investments to upgrade the acquired water distribution system and increase resilience of the system.
Illinois American Water currently provides reliable water and wastewater services to more than 1.3 million people in its service territories.
Acquisitions Essential for Water Space
Aging of assets and fragmentation are primary concerns of the existing U.S. water and wastewater industry. Per an American Water report, more than 53,000 water systems in the United States are providing water solutions to customers at present, which creates operational challenges in meeting the requirement for replacement, and modification of the aging water and wastewater infrastructure. At present, only 7% of the country’s systems serve a population of more than 10,000 and a mere 1% of the systems cater to more than 100,000 people.
Per the Water and Wastewater Equipment Manufacturers Association, an estimated $750 billion investment is necessary to maintain and expand the drinking water and wastewater service to meet demand over the next 20 years.
American Water is quite active in acquiring small service providers. Last year, the company added more than 36,000 customers to the existing customer base through acquisitions and its yet-to-be-completed deal could add another 19,000 customers to the existing customer base. In addition to consolidating, the company is making regular investments to upgrade the existing and acquired assets. It is planning to invest $8.8-$9.4 billion in the 2020-2024 time period and $20-$22 billion in the next decade to upgrade, as well as maintain its infrastructure.
Likewise, another water utility, Essential Utilities (WTRG - Free Report) has not only expanded water and wastewater operations through acquisitions but also ventured into the natural gas distribution business through the acquisition of Peoples. The company aims to invest more than $2.8 billion over the 2020-2022 time period to rehabilitate and strengthen water, as well as gas infrastructure. Other water utilities like California Water Service Group (CWT - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) are also taking the inorganic route to expand operations in the United States, as well as making investments to upgrade infrastructure.
Price Performance
Shares of American Water have outperformed the industry in the past 12 months.
Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>