American Water Works Company
) unit Pennsylvania American Water decided to increase its water
storage capacity my making fresh investments of $16.5 million. Of
this $11.5 million will be used to construct 9 new water storage
tanks and $5 million will be kept aside for repair and
maintenance of 14 existing water storage tanks.
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The decision to invest in new storage tanks was driven by the
need for sufficient and reliable water supply in its service
territories. The new storage tanks will increase Pennsylvania
American Water's water storage capacity by around 4.4 million
gallons and are expected to become operational by 2013 end. The
new storage capacity will help the company to meet the growing
demand for water from customers and for fire protection.
The repair and maintenance of the existing 14 storage units will
not only ensure reliable supply of water to its customers but
also save costs substantially in contrast to replacing the
structures. These savings will free up capital for strategic
Recently, Pennsylvania American Water expanded its presence in
northeast Pennsylvania by acquiring two water systems for a total
price of $1.65 million. The strategy to grow through organic and
inorganic initiatives will help the company to meet increasing
Illinois American Water has also invested about $330 million in
water and wastewater system improvements across the state in the
2009 through 2013 period.
As per American Water Works Association, the maintenance and
replacement of outdated water systems in the U.S. will cost at
least $1 trillion over the next 25 years. The 2013 capital budget
of the water utility
Connecticut Water Service Inc.
) includes $31.3 million for infrastructure investment. Although
it is an uphill task, systematic investments from water utilities
would make it more feasible.
American Water Works Company currently has a Zacks Rank #2 (Buy).
We also like
Aqua America Inc.
) having a Zacks Rank #1 (Strong Buy).
American States Water Company
) also looks favorable with a Zacks Rank #2 (Buy).
Voorhees, NJ based American Water Works Company was founded in
1886. This water and wastewater utility caters to approximately
14 million residents across the country and parts of
Canada. With approximately 6,700 employees, the company's
market capitalization is $7.17 billion.