American Water Works Stock: Is AWK Outperforming the Utility Sector?

Camden, New Jersey-based American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States. Valued at $27.7 billion by market cap, the company operates approximately 80 surface water treatment plants, 520 groundwater treatment plants, and 190 wastewater treatment plants.

Companies worth $10 billion or more are generally described as “large-cap stocks,” American Water Works fits right into that category, with its market cap exceeding the threshold, reflecting its substantial size, dominance and influence in the regulated water utility industry.

AWK touched its 52-week high of $152.07 on Mar. 10 and is currently trading 6.7% below that peak. The stock has surged 12.6% over the past three months, significantly outpacing the Utilities Select Sector SPDR Fund’s (XLU) 3.7% gains during the same time frame.

However, AWK has slightly underperformed the utility sector over the longer term. AWK stock has dipped 3.7% over the past six months and surged 20.1% over the past 52 weeks, compared to XLU’s 1% decline over the past six months and 24.1% gains over the past year.

To confirm the recent upturn, AWK has consistently traded above its 50-day moving average since mid-February and above its 200-day moving average since late February.

American Water Works’ stock observed a marginal gain and maintained a positive momentum for the next three trading sessions after the release of its impressive Q4 results on Feb. 19. During fiscal 2024, the company completed 13 acquisitions, adding nearly 70,000 customers which helped the company achieve its acquisition-led growth target. In Q4, the company’s operating revenues surged 16.4% year-over-year to $1.2 billion, exceeding the Street’s expectations by a notable margin. Meanwhile, its net income surged 39.8% year-over-year to $239 million and its EPS of $1.22 surpassed the consensus estimates by 8%, boosting investor confidence.

While AWK slightly lagged behind its peer Essential Utilities, Inc.’s (WTRG) 2.3% gains over the past six months, it has notably outperformed WTRG’s 6.6% returns over the past year.

Among the 15 analysts covering the AWK stock, the consensus rating is a “Moderate Buy.” As of writing the stock is trading marginally above its mean price target of $141.08.