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American Water (AWK) Unit Gets Approval to Buy BASA for $230M
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American Water Works Company, Inc.’s (AWK - Free Report) subsidiary, Pennsylvania American Water, recently announced that it has attained approval from the Pennsylvania Public Utility Commission to acquire the Butler Area Sewer Authority (“BASA”) wastewater system for $230 million.The transaction is expected to close by 2023 end.
The acquisition will expand Pennsylvania American Water’s footprint to more than 32.5 square miles and add nearly 15,000 consumers in the Butler area. The company will invest more than $75 million in the water system to be acquired from BASA to improve the wastewater system and make necessary treatment and collection system upgrades.
Growth Prospects
As of Sep 30, 2023, American Water had closed 14 agreements to acquire assets in six states. Closure of all these transactions resulted in an additional 7,900 customer connections. The 32 acquisitions under contracts will further add 88,100 customers to the company’s existing base.
American Water Works aims to invest $2.9 billion in 2023 to strengthen and expand its water and wastewater infrastructure. The acquisitions will further expand company’s customer base, and investment made to upgrade the acquired assets will allow it to maintain and provide high-quality services to its new customers.
Over the long term, American Water aims to invest in the range of $16-17 billion in the 2024-2028 time period and $34-$38 billion between 2024 and 2033.
Price Performance
Over the past month, shares of AWK have rallied 2.9% compared with the industry’s 1.5% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
American Water currently has a Zacks Rank #3 (Hold).
Some better-ranked companies from the same industry are Veolia Environnement SA (VEOEY - Free Report) , California Water Service Group (CWT - Free Report) and SJW Group Inc. (SJW - Free Report) . Veolia sports a Zacks Rank #1 while California Water and SJW Group carry a Zacks Rank #2 (Buy) at present.
VEOEY’s long-term (three- to five-year) earnings growth rate is pegged at 8.7%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) indicates an increase of 239% over 2022’s reported figure.
The Zacks Consensus Estimate for CWT’s 2023 EPS indicates a year-over-year increase of 7.9%. The Zacks Consensus Estimate for 2023 sales suggests a rise of 0.4% over 2022’s reported figure.
The Zacks Consensus Estimate for SJW’s 2023 EPS indicates a year-over-year increase of 5%. The Zacks Consensus Estimate for 2023 sales suggests a rise of 4.7% over 2022’s reported figure.
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American Water (AWK) Unit Gets Approval to Buy BASA for $230M
American Water Works Company, Inc.’s (AWK - Free Report) subsidiary, Pennsylvania American Water, recently announced that it has attained approval from the Pennsylvania Public Utility Commission to acquire the Butler Area Sewer Authority (“BASA”) wastewater system for $230 million.The transaction is expected to close by 2023 end.
The acquisition will expand Pennsylvania American Water’s footprint to more than 32.5 square miles and add nearly 15,000 consumers in the Butler area. The company will invest more than $75 million in the water system to be acquired from BASA to improve the wastewater system and make necessary treatment and collection system upgrades.
Growth Prospects
As of Sep 30, 2023, American Water had closed 14 agreements to acquire assets in six states. Closure of all these transactions resulted in an additional 7,900 customer connections. The 32 acquisitions under contracts will further add 88,100 customers to the company’s existing base.
American Water Works aims to invest $2.9 billion in 2023 to strengthen and expand its water and wastewater infrastructure. The acquisitions will further expand company’s customer base, and investment made to upgrade the acquired assets will allow it to maintain and provide high-quality services to its new customers.
Over the long term, American Water aims to invest in the range of $16-17 billion in the 2024-2028 time period and $34-$38 billion between 2024 and 2033.
Price Performance
Over the past month, shares of AWK have rallied 2.9% compared with the industry’s 1.5% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
American Water currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked companies from the same industry are Veolia Environnement SA (VEOEY - Free Report) , California Water Service Group (CWT - Free Report) and SJW Group Inc. (SJW - Free Report) . Veolia sports a Zacks Rank #1 while California Water and SJW Group carry a Zacks Rank #2 (Buy) at present.
VEOEY’s long-term (three- to five-year) earnings growth rate is pegged at 8.7%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) indicates an increase of 239% over 2022’s reported figure.
The Zacks Consensus Estimate for CWT’s 2023 EPS indicates a year-over-year increase of 7.9%. The Zacks Consensus Estimate for 2023 sales suggests a rise of 0.4% over 2022’s reported figure.
The Zacks Consensus Estimate for SJW’s 2023 EPS indicates a year-over-year increase of 5%. The Zacks Consensus Estimate for 2023 sales suggests a rise of 4.7% over 2022’s reported figure.