AWK - American Water Works: Water Utility Giant With A Safe Dividend

2024-02-12 12:30:00 ET

Summary

• American Water Works is the largest publicly traded water and wastewater utility in the US by consumers, providing its water and wastewater services to roughly 14 million people across 14 different states.
• To date, the company has increased its dividend for 16 consecutive years. The 10-year dividend growth rate is 9.8%.
• With a payout ratio of 58.4%, backed further by a product that must be consumed for life, this dividend is about as safe as it gets.

American Water Works Company Inc. ( AWK ) is a utility company that provides water and wastewater services in the United States. Founded in 1886, American Water Works is now a $24 billion (by market cap) water utility giant that employs more than 6,000 people.

American Water Works provides its water (approximately 93% of FY 2022 revenue) and wastewater (approximately 7% of FY 2022 revenue) services to roughly 14 million people across 14 different states. By customers, this is the largest publicly traded water and wastewater utility in the US.

The company’s main segment is Regulated Businesses, which accounted for 92% of FY 2022 revenue and comprises the core water and wastewater utility operations. A small component of the company is unregulated, serving 18 different military installations on long-term (usually 50 years) contracts....

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