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American Water Works: I Don't Believe We're Going Anywhere


  • American Water Works is a stable and profitable water company with high margins and regulated income.
  • However, the company's valuation is too high, with a P/E ratio above its 20-year average.
  • The company's growth prospects and low dividend yield do not justify the premium price, making it a "HOLD" investment at this time, waiting for the company's valuation to improve.
  • Looking for a helping hand in the market? Members of iREIT on Alpha get exclusive ideas and guidance to navigate any climate. Learn More »
Waste water

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Dear readers/followers,

I typically invest in one of two sorts of companies. The first sort is a sort of lower-yielding, stable dividend growth company with a good upside annualizing 13-15% on the basis of pure fundamentals, dividend growth, and slow earnings growth. Some reversal might be

The company discussed in this article is only one potential investment in the sector. Members of iREIT on Alpha get access to investment ideas with upsides that I view as significantly higher/better than this one. Consider subscribing and learning more here.

This article was written by

Wolf Report profile picture

Wolf Report is a senior analyst and private portfolio manager with over 10 years generating value ideas in European and North American markets.

He is a contributing author for the investing group iREIT on Alpha where in addition to the U.S. market, he covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of YORW, UPNRY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks i write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.

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Comments (6)

Mick Research profile picture
@Wolf Report The stock is now trading at ~$115. Are you a buyer?
moseharper profile picture
In the $50-60 range, it will be a good buy.
Good call here.
Utilities were so incredibly overvalued.
Will look to buy AWK 15-20% lower
Patiently awaiting $100 and lower---

Interest rates are higher for longer-------needs a 4% divy
moseharper profile picture
Seems to be a lot of strong arguments to hold, if not buy at today's price.
I've owned this company for years and made a lot of money on it. I still have substantial holdings in it and will not buy more, but certainly not sell any.
Yes, it is a holding that I have had for some time.
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