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American Water's (AWK) Unit to Invest $2.5M in System Upgrade

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American Water Works (AWK - Free Report) has announced that its unit, Pennsylvania American Water, will invest $2.5 million to replace 3,300 feet of water mains in South Park Township, Allegheny County. This new upgrade will provide high-quality, reliable and affordable water service and fire protection to the customers in the region.

Since a major portion of water and wastewater pipelines are nearing toward end of effective service life, timely repair, maintenance and upgrades become essential to provide reliable services to customers.

Pennsylvania American Water has been upgrading and maintaining its water and wastewater infrastructure. It has invested nearly $688 million in 2023 for infrastructure upgrades. The company will continue investing to make essential upgrades and maintain aging assets in the long term.

Large Investment Needed In Water Space

Per U.S. Environmental Protection Agency, investments of $625 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, for meeting demand over the next 20 years. Water infrastructure, like water mains, storage tanks and purifying units, needs maintenance at proper intervals.

American Water aims to invest $3.1 billion in 2024, with a major portion utilized for infrastructure improvements in Regulated Businesses. Over the long term, AWK aims to invest in the range of $16-$17 billion in 2024-2028 and $34-$38 billion in 2024-2033.

Other water utilities, like Essential Utilities (WTRG - Free Report) , California Water Service Group (CWT - Free Report) and Middlesex Water (MSEX - Free Report) , have well-chalked-out capital investment plans to strengthen infrastructure.

Essential Utilities plans to invest $1.3-$1.4 billion in 2024 and $7.2 billion in 2024-2028 to improve water and natural gas systems, and better serve customers with the help of improved information technology.

California Water Service plans to invest more than $365 million in capital expenditures in 2024.

Middlesex Water plans to invest $226 million during 2024-2026 to strengthen its water and wastewater infrastructure, and provide services to customers in a safe, reliable and efficient manner.

The Zacks Consensus Estimate for WTRG, CWT and MSEX’s 2024 earnings indicates growth of 9.7%,147.3% and 29.6% from the year-ago levels, respectively.

Price Performance

Over the last six months, American Water has gained 1.3% compared with the industry’s 7.9% growth.

Zacks Investment Research
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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.

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