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Can AWK Leverage Customer Additions to Support Long-Term Growth?
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Key Takeaways
AWK added about 52,700 customers via acquisitions and nearly 9,000 organically in first-half 2026.
AWK had 19 pending acquisitions representing around 56,600 potential customers as of June 30, 2026.
AWK plans to invest $19-$20 billion through 2030, supporting 8-9% rate-base growth.
American Water Works (AWK - Free Report) is expanding its operations through regulated acquisitions and organic growth, adding customers across its service territories. The expansion is strengthening its regulated footprint and increasing the number of customers served by its water and wastewater systems.
In the first six months of 2026, AWK added approximately 52,700 customers through regulated acquisitions, including about 47,000 customers from its Nexus Water Group acquisition, which was completed in June. It also added nearly 9,000 customers organically across existing systems.
AWK also had 19 pending acquisition agreements as of June 30, 2026, representing around 56,600 potential customers. Alongside its proposed merger with Essential Utilities, continued customer additions could broaden AWK’s regulated footprint and create opportunities for further infrastructure investment.
Customer expansion, supported by continued infrastructure investment, provides AWK with additional opportunities to recover costs through regulated rates. The company plans to invest approximately $3.7 billion in 2026 and $19-$20 billion through 2030, supporting 8-9% rate-base growth through infrastructure investments, regulated acquisitions and organic expansion. AWK also reaffirmed its 2026 adjusted EPS guidance of $6.02-$6.12.
As the regulated customer base expands, AWK can increase demand for water and wastewater infrastructure, supporting additional investment and regulated cost recovery. This expansion can strengthen the company’s revenue base and support sustained long-term earnings growth.
Utilities Expand Customer Base Organically & Inorganically
Utilities expand their customer base through organic growth from population and economic development, while acquisitions provide additional expansion opportunities. These strategies can support higher demand, infrastructure investment and long-term revenue growth.
ONE Gas (OGS - Free Report) benefited from customer growth in Oklahoma and Texas, which contributed $1.4 million to second-quarter 2026 residential sales revenues and supported ongoing system expansion.
Southwest Gas Holdings (SWX - Free Report) benefited from 1% net customer growth during the 12 months ended June 2026, which added $4.5 million to operating margin and supported continued infrastructure investment.
The Zacks Rundown on AWK
AWK’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates an increase of 7.98% and 8.27%, respectively, year over year.
Image Source: Zacks Investment Research
AWK’s Stock Trading at a Premium
AWK is trading at a premium to the industry, with a forward 12-month price-to-earnings ratio of 20.03X versus the industry average 16.02X.
Image Source: Zacks Investment Research
AWK’s Stock Price Performance
In the past three months, the company’s shares have plunged 6.9% compared with the industry’s 5.6% decline.
View the Zacks #1 Rank List
Image: Bigstock
Can AWK Leverage Customer Additions to Support Long-Term Growth?
Key Takeaways
American Water Works (AWK - Free Report) is expanding its operations through regulated acquisitions and organic growth, adding customers across its service territories. The expansion is strengthening its regulated footprint and increasing the number of customers served by its water and wastewater systems.
In the first six months of 2026, AWK added approximately 52,700 customers through regulated acquisitions, including about 47,000 customers from its Nexus Water Group acquisition, which was completed in June. It also added nearly 9,000 customers organically across existing systems.
AWK also had 19 pending acquisition agreements as of June 30, 2026, representing around 56,600 potential customers. Alongside its proposed merger with Essential Utilities, continued customer additions could broaden AWK’s regulated footprint and create opportunities for further infrastructure investment.
Customer expansion, supported by continued infrastructure investment, provides AWK with additional opportunities to recover costs through regulated rates. The company plans to invest approximately $3.7 billion in 2026 and $19-$20 billion through 2030, supporting 8-9% rate-base growth through infrastructure investments, regulated acquisitions and organic expansion. AWK also reaffirmed its 2026 adjusted EPS guidance of $6.02-$6.12.
As the regulated customer base expands, AWK can increase demand for water and wastewater infrastructure, supporting additional investment and regulated cost recovery. This expansion can strengthen the company’s revenue base and support sustained long-term earnings growth.
Utilities Expand Customer Base Organically & Inorganically
Utilities expand their customer base through organic growth from population and economic development, while acquisitions provide additional expansion opportunities. These strategies can support higher demand, infrastructure investment and long-term revenue growth.
ONE Gas (OGS - Free Report) benefited from customer growth in Oklahoma and Texas, which contributed $1.4 million to second-quarter 2026 residential sales revenues and supported ongoing system expansion.
Southwest Gas Holdings (SWX - Free Report) benefited from 1% net customer growth during the 12 months ended June 2026, which added $4.5 million to operating margin and supported continued infrastructure investment.
The Zacks Rundown on AWK
AWK’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates an increase of 7.98% and 8.27%, respectively, year over year.
Image Source: Zacks Investment Research
AWK’s Stock Trading at a Premium
AWK is trading at a premium to the industry, with a forward 12-month price-to-earnings ratio of 20.03X versus the industry average 16.02X.
Image Source: Zacks Investment Research
AWK’s Stock Price Performance
In the past three months, the company’s shares have plunged 6.9% compared with the industry’s 5.6% decline.
Image Source: Zacks Investment Research
AWK’s Zacks Rank
AWK currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.