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American Water Arm to Invest $2M in Water Line Replacement

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American Water Works (AWK - Free Report) announced that its subsidiary, Pennsylvania American Water will invest $2 million to replace 9,000 feet of water mains in Moosic, Old Forge and Duryea. The primary objective of replacing the water mains is to provide reliable services to customers, reduce service disruptions and increase water flows for firefighting.

Through this water main replacement project, the company will replace the old existing small diameter cast iron pipes with eight and 12-inch new ductile iron mains, which will increase water pressure and cater to rising demand from customers.

American Water, through its different subsidiaries, has taken initiatives to make the necessary repairs of old and soiled main lines in its service territories. Last month, Illinois American Water decided to invest $6.7 million to replace 4.2 miles of water mains in a local water system.

Billions of gallons of potable water are wasted each year in the United States due to numerous main line breaks. To minimize wastage in its system, American Water tries to upgrade water and wastewater infrastructure in a regular manner. The company is quite active in making regular investments in its service territories and maintaining the water mains. American Water has plans to invest $8.8-$9.4 billion in the 2020-2024 time period and $20-$22 billion in the next decade. These investments will allow it to maintain and expand the existing water infrastructure, and provide reliable water services to the expanding customer base.

In addition to American Water, Essential Utilities (WTRG - Free Report) is also making regular investments in water and wastewater systems. Its long-term plan is to invest $2.8 billion in the 2020-2022 time period to rehabilitate and strengthen the existing water and natural gas pipeline systems.

Price Performance

Shares of American Water have outperformed the industry in the past 12 months.

Zacks Rank and Key Picks

Currently, the company has a Zacks Rank #3 (Hold). A couple of better-ranked water utilities include The York Water Company (YORW - Free Report) and Middlesex Water Company (MSEX - Free Report) . York Water sports a Zacks Rank #1 (Strong Buy) and Middlesex Water holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

York Water delivered average positive earnings surprise of 13.61% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has moved up 0.8% in the past 90 days.

Middlesex Water Company delivered average positive earnings surprise of 2.19% in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has moved up 2.5% in the past 90 days.

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