American Water Continues Project Work Amid Coronavirus Woes
American Water Works AWK announced that its subsidiary, Illinois American Water will continue with planned infrastructure projects across its service areas amid the novel coronavirus threat. Infrastructure maintenance and upgrades at regular intervals are quite essential to ensure potable water and wastewater services to customers.
Illinois American Water provides water and wastewater services to 1.3 million people in its service territories. Per World Health Organization, washing hands with soap at regular intervals and maintaining social distancing are crucial measures to avoid the infection.
COVID-19 has been spreading like a wildfire across the United States. The Trump administration has taken the necessary steps to check the spread of this contagious virus. Per Johns Hopkins University and Medicine, the virus has already infected 337,637 people in the United States and claimed 9,647 lives. To check further spread of this virus, social distancing guidelines will be effective through Apr 30.
How Can We Fight Back?
Per analysis by the UN Department of Economic and Social Affairs, the COVID-19 pandemic is disrupting global supply chains and international trade, with around 100 countries across the globe having closed their borders to check the spread of the virus. The report also suggests that the global economy could shrink up to 1% in 2020 due to the coronavirus pandemic.
The above observation is clearly indicating that novel coronavirus has impacted lives economically. Governments across the globe are coming up with stimulus packages to help millions of people who are suffering financially. The $2-trillion U.S. stimulus package will assist millions of unemployed people and those belonging to low-income group.
Clean water will play a very critical role in fighting against the spread of novel coronavirus. Water services on a 24x7 basis are quite essential in this regard. As the majority of the existing water and wastewater infrastructure of the United States is getting old, continuous upgrades and repair of old and soiled pipelines will ensure avoidance of pipeline breaks.
American Water is quite active in upgrading and maintaining its existing assets. The company has plans to invest $8.8-$9.4 billion in the 2020-2024 time period and $20-$22 billion in the next decade. Another water utility Middlesex Water Company MSEX has announced that it will continue the ongoing construction projects to maintain and enhance the reliability and resiliency of its water treatment and distribution systems. These activities from water utilities will assure job safety to its employees when millions are filing for unemployment.
Water utilities like American Water and California Water Service Group CWT, among others, have decided to continue providing services to customers despite their water and wastewater services dues. Hence, water utilities across the United States are trying to help users in this difficult period and assisting them to combat the virus.
Price Performance
Shares of American Water have outperformed the industry in the past 12 months.
Zacks Rank & Key Pick
Currently, American Water has a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is American States Water Company AWR. American States Water sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
American States Water delivered trailing four-quarter average positive earnings surprise of 6.5%. The Zacks Consensus Estimate for 2020 earnings per share has moved up 3.2% in the past 60 days.
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Middlesex Water Company (MSEX) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
California Water Service Group (CWT) : Free Stock Analysis Report
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