American Water Works Company, Inc.
) continues to follow steady inorganic growth strategy to expand
its operations. The company's subsidiary Pennsylvania American
Water has acquired three water and wastewater systems - Clean
Treatment Sewage Company, a private water system and the assets
of the Franklin Township Municipal Sewer Authority. Pennsylvania
American invested nearly $6.9 million for the acquisitions.
AMER WATER WORK (AWK): Free Stock Analysis
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Pike County-based Clean Treatment Sewage Company engages in
wastewater operations and serves nearly 1,000 people. Previously,
the Pennsylvania Public Utility Commission ordered Pennsylvania
American Water to buy this property for boosting Clean Treatment
Sewage Company's existing operations. Currently, the company will
utilize its technical expertise to improve the damaged wastewater
Pennsylvania American Water purchased a private water system in
Delaware Township, Pike County, which serves approximately 300
Adams County-based Franklin Township Municipal Sewer Authority
possesses waste water systems with a capacity to serve 800
residents, and approximately 24 commercial as well as municipal
The acquisitions will enable Pennsylvania American Water to add
approximately 2,100 customers. The company will provide
wastewater collection and treatment services to the customers.
The inclusion of the wastewater systems will help the company to
reap benefits from its existing facilities in the county.
American Water Works continues to strengthen its footprint in the
state of Pennsylvania. Year to date, Pennsylvania American Water
alone completed six acquisitions. In Jun 2013, the company
acquired a municipal wastewater system in Beaver County with a
transaction value of $1.8 million.
In 2012, American Water Works generated approximately 21.7% of
total revenues from Pennsylvania. We believe that this factor
propels the company to invest more in the region to improve and
expand its operations.
We note that American Water Works strongly follows inorganic
growth program and expects to incur $0.8 billion to $1 billion
per year under capital expenditure program, out of which a slice
is set aside for strategic acquisitions. On Aug 16, 2013, the
company's subsidiary Iowa American Water acquired City of Dixon
American Water Works' continuous effort toward infrastructure
addition and upgrade the existing assets will enable the company
to provide uninterrupted water to its customers while
strengthening system competence. These factors will subsequently
improve reliability and public safety, while maintaining
government water quality regulations.
American Water Works currently has a Zacks Rank # 3 (Hold).
However, other water utilities that are worth considering include
Connecticut Water Service Inc.
) with a Zacks Rank #1 (Strong Buy), and
), each with a Zacks Rank #2 (Buy).
Voorhees, N.J.-based American Water Works was founded in 1886.
The company serves around 14 million people with water and