We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Water's Unit Acquires Mount Ephraim Sewer System
Read MoreHide Full Article
American Water Works Company (AWK - Free Report) announced that its subsidiary New Jersey American Water has completed the acquisition of wastewater assets of the Borough of Mount Ephraim, NJ, for nearly $1.4 million. The company signed the agreement to acquire the sewer system on Jan 16, 2019. This acquisition will add 1,800 new customers to its existing portfolio. The New Jersey Board of Public Utilities approved the acquisition on Jun 21, 2019.
New Jersey American Water, through its existing network, provides water and wastewater services to nearly 2.7 million people in New Jersey. The acquisition will allow the company to provide affordable high-quality services.
Per the acquisition agreement, New Jersey American Water will invest $4 million in the next four years to make required improvements in the existing sewer systems. The company will also freeze current sewer rates for residents for two years and increase rates no more than 3% annually for the three years after that.
New Jersey American Water keeps on making strategic acquisitions to expand existing operations and the customer base. In January 2019, the company acquired Roxbury Water Company, which added 4,000 customers.
Consolidation is Crucial for Water Industry
Currently, more than 53,000 water systems in the United States provide water and wastewater solutions to customers. Water and wastewater service providers are servicing a few hundred customers. The highly fragmented water industry creates operational challenges in meeting increasing requirement for water, as it becomes difficult for small water suppliers and wastewater service providers to make regular investments for upgrading old and soiled water and wastewater lines.
Per an American Water Works Association report, in excess of 7 billion gallons of water leak out of aging pipes owing to more than 200,000 water line breaks per year in the United States. Plus, old sewer systems increase the possibility of contamination of potable water sources. Hence, consolidation in this highly fragmented industry is crucial and of utmost importance.
American Water — which is one of the most active players in the water space — has already completed 67 acquisitions in the 2015-2019 time period (till Mar 31, 2019) in 10 states to add more than 110,000 customer connections. The pending ones, on completion, are expected to add nearly 61,500 customers to its customer base during the year.
In addition to American Water, water utilities like Global Water Resources, Inc. (GWRS - Free Report) and Aqua America are following the acquisition route to expand operations.
Price Movement
In the past six months, shares of American Water have outperformed the industry.
A better-ranked water utility in the same space is Middlesex Water Company (MSEX - Free Report) , sporting a Zacks Rank #1. It delivered average positive earnings surprise of 19.72% in the last four quarters. The Zacks Consensus Estimate for 2019 and 2020 has moved up 5.8% and 4.7%, respectively, in the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
American Water's Unit Acquires Mount Ephraim Sewer System
American Water Works Company (AWK - Free Report) announced that its subsidiary New Jersey American Water has completed the acquisition of wastewater assets of the Borough of Mount Ephraim, NJ, for nearly $1.4 million. The company signed the agreement to acquire the sewer system on Jan 16, 2019. This acquisition will add 1,800 new customers to its existing portfolio. The New Jersey Board of Public Utilities approved the acquisition on Jun 21, 2019.
New Jersey American Water, through its existing network, provides water and wastewater services to nearly 2.7 million people in New Jersey. The acquisition will allow the company to provide affordable high-quality services.
Per the acquisition agreement, New Jersey American Water will invest $4 million in the next four years to make required improvements in the existing sewer systems. The company will also freeze current sewer rates for residents for two years and increase rates no more than 3% annually for the three years after that.
New Jersey American Water keeps on making strategic acquisitions to expand existing operations and the customer base. In January 2019, the company acquired Roxbury Water Company, which added 4,000 customers.
Consolidation is Crucial for Water Industry
Currently, more than 53,000 water systems in the United States provide water and wastewater solutions to customers. Water and wastewater service providers are servicing a few hundred customers. The highly fragmented water industry creates operational challenges in meeting increasing requirement for water, as it becomes difficult for small water suppliers and wastewater service providers to make regular investments for upgrading old and soiled water and wastewater lines.
Per an American Water Works Association report, in excess of 7 billion gallons of water leak out of aging pipes owing to more than 200,000 water line breaks per year in the United States. Plus, old sewer systems increase the possibility of contamination of potable water sources. Hence, consolidation in this highly fragmented industry is crucial and of utmost importance.
American Water — which is one of the most active players in the water space — has already completed 67 acquisitions in the 2015-2019 time period (till Mar 31, 2019) in 10 states to add more than 110,000 customer connections. The pending ones, on completion, are expected to add nearly 61,500 customers to its customer base during the year.
In addition to American Water, water utilities like Global Water Resources, Inc. (GWRS - Free Report) and Aqua America are following the acquisition route to expand operations.
Price Movement
In the past six months, shares of American Water have outperformed the industry.
Zacks Rank and Key Pick
Currently, American Water has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked water utility in the same space is Middlesex Water Company (MSEX - Free Report) , sporting a Zacks Rank #1. It delivered average positive earnings surprise of 19.72% in the last four quarters. The Zacks Consensus Estimate for 2019 and 2020 has moved up 5.8% and 4.7%, respectively, in the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>