Summary
- American Water Works' primary business is treating and delivering more than 1 billion gallons of water a day.
- The stock is at the top of its 52-week price range and appreciated nearly 50% in the last year. Thus, its dividend yield is only 1.69%.
- The company is a $21.4 billion market-cap, operationally-compelling, long-established utility with a low (stable) beta in a sector beloved by ESG investors - water.
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Credit: Amwater.com
American Water Works (AWK) offers investors interested in environmental, social and governance (ESG) stocks a well-established (more than 130 years old), low-beta stock. As the picture above suggests, clean water is an easy product sell, even more so at AWK's low cost of about a penny a gallon.
However, because of the stock's significant price rise in the last year, the dividend yield has correspondingly shrunk to 1.69%. While the sector as a whole is in favor and the company expects organic growth, additional substantial near-term upside appears unlikely.
Investors may choose American Water Works for non-economic reasons; however, other utilities may offer better, long-term growth opportunities.
