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American Water Works Hits 52-Week High on Steady Growth

Drinking water and waste water service provider American Water Works Company, Inc. AWK hit a new 52-week high of $70.18 during yesterday’s trading session before closing a tad lower at $69.80. The stock has delivered a one-year return of about 30.8%.

Over the past 52 weeks, American Water Works’ share price has ranged from a low of $48.36 to a high of $70.18. Average volume of shares traded over the last three months is approximately 2.16 million.

Why is American Water Works Moving Up?

American Water Works’ shares have been on the rise following its 2015 results declared on Feb 25. The company posted 2015 earnings of $2.64 per share, surpassing the Zacks Consensus Estimate by a penny and increasing 10.5% year over year.

American Water Works has been a pretty decent performer having delivered positive earnings surprises in three out of the last four quarters, with an average positive surprise of 2.13%. The long-term earnings growth of the company is presently pegged at 7.44%.

American Water Works continues to benefit from its regulated business operations. In 2015, net income from continuing operations was $473 million, up nearly 9% year over year. The increase was due to revenue growth, driven by the company’s capital investment program and lower O&M expense.

On the earnings call, American Water reaffirmed its 2016 earnings guidance from continuing operations in the range of $2.75 to $2.85 per diluted share. Earnings per share are expected to improve over 2015on the back of acquisitions and organic growth initiatives.

Through acquisition and organic growth, the company added nearly 42,000 customers to its existing customer base in 2015. In addition, both business segments of American Water Works are showing signs of improvement, translating into better results.

American Water Works currently carries a Zacks Rank #3 (Hold). The York Water Company YORW, Connecticut Water Service Inc. CTWS and Middlesex Water Co. MSEX are other favorably ranked stocks in the water utility space. All three stocks carry a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
YORK WATER CO (YORW): Free Stock Analysis Report
 
CONN WATER SVC (CTWS): Free Stock Analysis Report
 
AMER WATER WORK (AWK): Free Stock Analysis Report
 
MIDDLESEX WATER (MSEX): Free Stock Analysis Report
 
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