American Water Works' earnings growth is consistently higher than most regulated electric utilities, even though core retail water use has steadily fallen as a result of efficiency savings.
The company operates in constructive regulatory environments that support recovery of prudent costs and support growth investments.
Bears
American Water Works' sizable plans for infrastructure replacement and upgrades could run into some pushback from rising rates for water that has traditionally been cheap.
American Water Works is the largest investor-owned US water and wastewater utility, serving nearly 4 million customers in 14 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets. The company's nonregulated business is water services for military bases, which operates under long-term contracts with regulated-like returns. The proposed Essential Utilities acquisition would add regulated water and wastewater utilities in Ohio, North Carolina, and Texas while increasing its presence in Illinois, Indiana, Pennsylvania, New Jersey, and Virginia.