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American Water's (AWK) Illinois Unit Invests in Water Mains
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American Water Works (AWK - Free Report) recently announced that its unit, Illinois American Water, has started working on a project to replace more than 20,000 feet of water mains in the company’s Champaign County water service area. The company will invest $6 million to upgrade and replace the aging infrastructure in the region.
It is quite essential to upgrade and replace the aging infrastructure to provide quality services to customers. This project will replace old pipelines and assist in the continuation of quality water services to customers and proper water pressure for the firefighters to tackle adverse situations.
Illinois American Water has been very active in upgrading and maintaining its water and wastewater infrastructure. Illinois American Water has either completed or planned investments of $948 million in water system improvements and nearly $204 million in wastewater system improvements, across Illinois from 2018 through 2023.
Investment Essential for Aging Water Infrastructure
Water and wastewater infrastructure of the water industry in the United States is aging and needs substantial investment. Delay in repair could cause frequent disruptions in 24x7 supply of potable water and sewer services.
Per the U.S. Environmental Protection Agency, investment of $473 billion and $271 billion is necessary to maintain and expand drinking water pipelines and for wastewater pipelines, respectively, to meet demand over the next 20 years. So, to avoid frequent breakage it is quite essential to make provisions for timely repair.
Utilities Making Systematic Investment
The water utilities are making systematic investments to replace and upgrade the aging water infrastructure.
American Water plans to invest around $13-$14 billion during 2022-2026 and around $28-$32 billion between 2022 and 2031, to upgrade as well as strengthen the existing water and wastewater infrastructure. Water utilities like California Water Service Group (CWT - Free Report) , Essential Utilities (WTRG - Free Report) and Middlesex Water (MSEX - Free Report) have well-chalked-out capital investment plans to strengthen their infrastructure.
California Water Service has more than $1 billion capital expenditure planned for the 2022-2024 time period. The current dividend yield of California Water Service is nearly 1.8%. The Zacks Consensus Estimate for CWT’s 2023 earnings indicates year-over-year growth of 9.3%.
Essential Utilities aims to invest $3 billion through 2024 to strengthen water and natural gas operations. The Zacks Consensus Estimate for WTRG’s 2022 earnings indicates year-over-year growth of 6.6%. The long-term (three to five years) earnings growth of WTRG is currently pegged at 6.1%. The current dividend yield of Essential Utilities is nearly 2.3%.
Middlesex Water plans to invest $229 million during 2022-2024 to strengthen its water and wastewater infrastructure for providing services to customers in a safe, reliable and efficient manner. The Zacks Consensus Estimate for MSEX’s 2022 and 2023 earnings indicates year-over-year growth of 28% and 7.6%, respectively. MSEX reported an average surprise of 2.02% in the last four quarters.
Price Performance
Shares of AWK have risen 7% in the past month compared with the industry’s 6.4% rally.
Image Source: Zacks Investment Research
Zacks Rank
American Water currently has a Zacks Rank #2 (Buy).
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American Water's (AWK) Illinois Unit Invests in Water Mains
American Water Works (AWK - Free Report) recently announced that its unit, Illinois American Water, has started working on a project to replace more than 20,000 feet of water mains in the company’s Champaign County water service area. The company will invest $6 million to upgrade and replace the aging infrastructure in the region.
It is quite essential to upgrade and replace the aging infrastructure to provide quality services to customers. This project will replace old pipelines and assist in the continuation of quality water services to customers and proper water pressure for the firefighters to tackle adverse situations.
Illinois American Water has been very active in upgrading and maintaining its water and wastewater infrastructure. Illinois American Water has either completed or planned investments of $948 million in water system improvements and nearly $204 million in wastewater system improvements, across Illinois from 2018 through 2023.
Investment Essential for Aging Water Infrastructure
Water and wastewater infrastructure of the water industry in the United States is aging and needs substantial investment. Delay in repair could cause frequent disruptions in 24x7 supply of potable water and sewer services.
Per the U.S. Environmental Protection Agency, investment of $473 billion and $271 billion is necessary to maintain and expand drinking water pipelines and for wastewater pipelines, respectively, to meet demand over the next 20 years. So, to avoid frequent breakage it is quite essential to make provisions for timely repair.
Utilities Making Systematic Investment
The water utilities are making systematic investments to replace and upgrade the aging water infrastructure.
American Water plans to invest around $13-$14 billion during 2022-2026 and around $28-$32 billion between 2022 and 2031, to upgrade as well as strengthen the existing water and wastewater infrastructure. Water utilities like California Water Service Group (CWT - Free Report) , Essential Utilities (WTRG - Free Report) and Middlesex Water (MSEX - Free Report) have well-chalked-out capital investment plans to strengthen their infrastructure.
California Water Service has more than $1 billion capital expenditure planned for the 2022-2024 time period. The current dividend yield of California Water Service is nearly 1.8%. The Zacks Consensus Estimate for CWT’s 2023 earnings indicates year-over-year growth of 9.3%.
Essential Utilities aims to invest $3 billion through 2024 to strengthen water and natural gas operations. The Zacks Consensus Estimate for WTRG’s 2022 earnings indicates year-over-year growth of 6.6%. The long-term (three to five years) earnings growth of WTRG is currently pegged at 6.1%. The current dividend yield of Essential Utilities is nearly 2.3%.
Middlesex Water plans to invest $229 million during 2022-2024 to strengthen its water and wastewater infrastructure for providing services to customers in a safe, reliable and efficient manner. The Zacks Consensus Estimate for MSEX’s 2022 and 2023 earnings indicates year-over-year growth of 28% and 7.6%, respectively. MSEX reported an average surprise of 2.02% in the last four quarters.
Price Performance
Shares of AWK have risen 7% in the past month compared with the industry’s 6.4% rally.
Image Source: Zacks Investment Research
Zacks Rank
American Water currently has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.