American Water Works Company
) continues with its effort to upgrade the existing utility
infrastructure. Recently, the company's unit Iowa American Water
announced that it is almost on the verge of completing its two
important water main improvement projects in Clinton District,
Iowa. The cost of the project is $0.6 million. Both the projects
are expected to be online in Sep 2013.
Per the project, Iowa American Water is replacing and upgrading
approximately 1700 feet of aging water main, along South 19th
Street north of 22nd Avenue South to Manufacturing Drive. In
addition, the company will be replacing nearly 2100 feet of 6
inch water main and upgrading it to an 8 inch water main on 33rd
Avenue North. Both restoration activities and shifting of the
service lines to the new water main will continue through Oct
2013 while the projects will be in service by the end of this
The infrastructure upgrade program will enable Iowa American
Water to provide uninterrupted water supply to its customers and
strengthen system competence. Further, this project will help to
increase water flow for firefighting activities in the locality.
These factors will subsequently improve reliability, consumer
confidence and public safety while maintaining government water
As per a report circulated by the U.S. Environmental Protection
Agency (EPA), the U.S. based utilities need to invest $384
billion through 2030 to refurbish and improve drinking water
system. It is evident from American Water Works' activities that
the company is laboriously following this guideline. On Sep 12,
2013, Pennsylvania American Water, a unit of the company,
announced the commencement of two water storage tank construction
projects in Delaware Township, Pike Country.
During the first six months of 2013, American Water invested $0.4
billion under its capital spending program. In 2013, the company
intends to invest approximately $1 billion in various projects to
ensure the safety and standard of utility operations.
American Water Works' net cash from operating activities was $0.3
billion during the first six months of 2013 and the cash balance
as of Jun 30, 2013 was $20.4 million. Recently, the company
strengthened its existing liquidity position in terms of
raising commitments under its revolving credit facility and
commercial paper program. We believe that a stable financial
position allows the company to follow steady infrastructure
development activities along with strategic acquisitions.
American Water Works currently has a Zacks Rank # 3 (Hold).
However, other water utilities that are currently performing well
Connecticut Water Service Inc.
Consolidated Water Co. Ltd.
), each with a Zacks Rank #2 (Buy).
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CONSOLTD WATER (CWCO): Free Stock Analysis
SJW CORP (SJW): Free Stock Analysis Report
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