Water Investment Ideas

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American Water Works (AWK) - >>> Dividend-paying utility stocks are an excellent way for investors to diversify their portfolios and generate steady income. American Water Works (NYSE:AWK) is one of the leaders in this regard in the U.S., with a long history of paying out dividends to its shareholders.


https://finance.yahoo.com/news/3-dividend-paying-utility-stocks-172034663.html


On Feb. 15, American Water released its earnings report for the fourth quarter. This included GAAP earnings per share of 81 cents, beating analysts’ estimates by one cent, and total revenue of $931 million, which represented a decrease of 2.1% year-over-year, but still exceeded Wall Street forecasts by an impressive $7.26 million.

Furthermore, the public utility company reported closing on 26 regulated water and wastewater system acquisitions in 2022. This resulted in an extra 70,000 customer connections worth $0.3 billion as an investment.

Overall, the company’s earnings performance is impressive. It is the fourth time in a row that American Water Works has beat Wall Street consensus estimates.

However, despite this excellent performance, the stock is down almost 3% this year. The reason? The company’s policy of expanding via acquisitions could lead to increased costs from rising interest rates and higher input costs (for chemicals and other inputs). This outlook has clearly unsettled potential investors.

Nevertheless, federal support for water infrastructure, accompanied by organic growth through acquisitions and improved profit margins, is predicted to be a positive factor for American Water Works.

American Water Works is an excellent choice for those hoping to invest in utilities. There are some short-term headwinds. But the long-term picture is clear for this one.

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