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American Water's (AWK) Arm to Spend $10M on Water Mains
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American Water Works Company, Inc. (AWK - Free Report) has announced that its unit, New Jersey American Water, will invest $10 million to replace nearly 4 miles of aging water mains in the Leonardo section of Middletown, NJ.
New Jersey American Water will replace the old water mains installed during the 1930s with new 6- and 8-inch ductile iron mains. The proper upgrade and maintenance of water mains will ensure an adequate potable water supply for its customers.
The company has been upgrading and maintaining its water and wastewater infrastructure methodically by replacing old water mains. It plans to remove all aging lead and galvanized service lines by 2031 and provide high-quality services to 2.8 million people in the state.
Aging Infrastructure – A Concern
Per the findings of the American Society of Civil Engineers (“ASCE”), water main breaks occur every two minutes in the United States due to the aging of the existing water infrastructure. Per the ASCE finding, due to the delay in essential pipeline repairs and maintenance, 2.1 trillion gallons of treated water is lost every year in the United States. It is evident from the findings of ASCE that a substantial portion of the U.S. water infrastructure has aged and is nearing the end of its effective service life. The repair and upgrade of miles of aging pipelines are essential to maintain quality water service. A delay in repair could cause frequent disruptions in the 24x7 supply of potable water services.
Per the U.S. Environmental Protection Agency, investments of $473 billion and $271 billion are necessary to maintain and expand drinking water pipelines and wastewater pipelines, respectively, to meet the demand over the next 20 years. Water infrastructure, like overhead storage tanks and water purifying units, needs maintenance at proper intervals.
Utilities Making Systematic Investment
Given the above-mentioned scenario, it is evident that systematic investment to upgrade and maintain the old infrastructure and make provisions for adding new infrastructure will assist the operators in meeting the rising customer demand. Water utilities are making systematic investments to replace and upgrade their aging water infrastructure.
American Water plans to invest $13-$14 billion between 2022 and 2026, and $28-$32 billion between 2022 and 2031 to upgrade and 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 infrastructures.
California Water Service has more than $1 billion in capital expenditure planned for 2022-2024. The current dividend yield of the company is 1.8%. The Zacks Consensus Estimate for CWT’s 2023 earnings indicates year-over-year growth of 14.3%. The current dividend yield of California Water Service is 1.9%. California Water Service currently has a Zacks Rank #2 (Buy).
Essential Utilities aims to invest $3 billion through 2024 to strengthen water and natural gas operations. The Zacks Consensus Estimate for WTRG’s 2022 and 2023 earnings indicates year-over-year growth of 6.6% and 6.7%, respectively. 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 2.8%. Essential Utilities currently has a Zacks Rank #2.
Middlesex Water plans to invest $229 million during 2022-2024 to strengthen its water and wastewater infrastructure to provide 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 15.5% and 10.5%, respectively. MSEX’s current dividend yield is 1.5%. Middlesex Water currently has a Zacks Rank #3 (Hold).
Price Performance
Shares of AWK have risen 15.1% in the past three months compared with the industry’s 7.4% growth.
Image: Bigstock
American Water's (AWK) Arm to Spend $10M on Water Mains
American Water Works Company, Inc. (AWK - Free Report) has announced that its unit, New Jersey American Water, will invest $10 million to replace nearly 4 miles of aging water mains in the Leonardo section of Middletown, NJ.
New Jersey American Water will replace the old water mains installed during the 1930s with new 6- and 8-inch ductile iron mains. The proper upgrade and maintenance of water mains will ensure an adequate potable water supply for its customers.
The company has been upgrading and maintaining its water and wastewater infrastructure methodically by replacing old water mains. It plans to remove all aging lead and galvanized service lines by 2031 and provide high-quality services to 2.8 million people in the state.
Aging Infrastructure – A Concern
Per the findings of the American Society of Civil Engineers (“ASCE”), water main breaks occur every two minutes in the United States due to the aging of the existing water infrastructure. Per the ASCE finding, due to the delay in essential pipeline repairs and maintenance, 2.1 trillion gallons of treated water is lost every year in the United States. It is evident from the findings of ASCE that a substantial portion of the U.S. water infrastructure has aged and is nearing the end of its effective service life. The repair and upgrade of miles of aging pipelines are essential to maintain quality water service. A delay in repair could cause frequent disruptions in the 24x7 supply of potable water services.
Per the U.S. Environmental Protection Agency, investments of $473 billion and $271 billion are necessary to maintain and expand drinking water pipelines and wastewater pipelines, respectively, to meet the demand over the next 20 years. Water infrastructure, like overhead storage tanks and water purifying units, needs maintenance at proper intervals.
Utilities Making Systematic Investment
Given the above-mentioned scenario, it is evident that systematic investment to upgrade and maintain the old infrastructure and make provisions for adding new infrastructure will assist the operators in meeting the rising customer demand. Water utilities are making systematic investments to replace and upgrade their aging water infrastructure.
American Water plans to invest $13-$14 billion between 2022 and 2026, and $28-$32 billion between 2022 and 2031 to upgrade and 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 infrastructures.
California Water Service has more than $1 billion in capital expenditure planned for 2022-2024. The current dividend yield of the company is 1.8%. The Zacks Consensus Estimate for CWT’s 2023 earnings indicates year-over-year growth of 14.3%. The current dividend yield of California Water Service is 1.9%. California Water Service currently has a Zacks Rank #2 (Buy).
Essential Utilities aims to invest $3 billion through 2024 to strengthen water and natural gas operations. The Zacks Consensus Estimate for WTRG’s 2022 and 2023 earnings indicates year-over-year growth of 6.6% and 6.7%, respectively. 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 2.8%. Essential Utilities currently has a Zacks Rank #2.
Middlesex Water plans to invest $229 million during 2022-2024 to strengthen its water and wastewater infrastructure to provide 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 15.5% and 10.5%, respectively. MSEX’s current dividend yield is 1.5%. Middlesex Water currently has a Zacks Rank #3 (Hold).
Price Performance
Shares of AWK have risen 15.1% in the past three months compared with the industry’s 7.4% growth.
Image Source: Zacks Investment Research
Zacks Rank
American Water currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here