American Water Works: Down 18% In 2022, Yet Still Richly Valued

Summary

• Utilities generally outperformed during the 2022 bear-market, but American Water Works' stock was down 18%.
• Despite the drop, AWK still trades at a rather rich TTM P/E = 21x and a forward P/E = 34x.
• However, strong federal water infrastructure support, growth by acquisition, and expectations for margin expansion are positive tailwinds for the company going forward.

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American Water Works (NYSE:AWK) provides water and wastewater services to approximately 1,700 communities across 14 states that serve approximately 3.4 million residential and commercial customers. The stock had a tough 2022 (see below), but while FY22 revenue is expected to dip

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I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.