American Water Works Arm Acquires Shrewsbury Township's Water System

American Water Works’ AWK subsidiary, New Jersey American Water, has completed its acquisition of the water system of Shrewsbury Township’s Alfred Vail Mutual Association community. This purchase, which serves 265 customer connections, followed the approval of the New Jersey Department of Community Affairs and the New Jersey Board of Public Utilities. This is the second acquisition in the State of New Jersey to be completed through the Water Infrastructure Protection Act (“WIPA”).As part of the deal, New Jersey American Water will maintain customer-affordable rates while making significant infrastructure investments in the community's water system. These initiatives include updating all water meters and locating and replacing all lead and galvanized steel service lines. Additionally, all of the system's aging water mains will be replaced.AWK Prioritizes AcquisitionsAmerican Water Works expanded its operations through systematic acquisitions. In 2024, the company completed 13 acquisitions, which added 69,500 customers. Including customers added through acquisitions, American Water Works increased its existing base by 90,000 customers. American Water Works’ pending 17 acquisitions (as of Jan. 1, 2025), when completed, will add another 24,200 customers.The recent one marks New Jersey American Water’s seventh acquisition in the past five years, adding more than 17,000 new water and wastewater customers. Additionally, it is the state of New Jersey and New Jersey American Water’s second WIPA sale following the company’s acquisition of Egg Harbor City’s water and wastewater system in June 2023, which added more than 1,500 water and wastewater customers.American Water Works expects to invest $40-$42 billion during 2025-2034 in infrastructure repairs and replacement, system resiliency and regulated acquisitions.Consolidation is a Necessity in the Water IndustryAccording to the American Society of Civil Engineers, nearly 50,000 community water systems and 14,000 wastewater treatment systems in the United States are offering water solutions to consumers. Some service providers are too small and financially weak to make necessary and expensive repairs on time, which increases the risk of contamination, breaks pipelines and disrupts services. Due to the delay in pipeline repairs and maintenance, billions of gallons of treated water are lost every year in the country.Large water utility companies continue to buy out smaller competitors to guarantee the provision of high-quality services to consumers and the necessary investment to upgrade acquired and old infrastructure. More consolidation is necessary to benefit from the slow pace of mergers and acquisitions.Some other companies are also focused on expanding operations through acquisitions:In April 2025, Middlesex Water Company MSEX announced that its unit Tidewater Utilities, Inc. has acquired the water assets of the Town of Ocean View (“TOV”) in Sussex County, DE, for $4.6 million. The acquisition of TOV’s assets will expand Middlesex Water’s operation in Delaware and add 900 customers to its existing base.MSEX’ long-term (three to five years) earnings growth rate is 13.96%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) implies year-over-year growth of 1.2%.Essential Utilities WTRG is also actively exploring opportunities to expand utility operations through the acquisition of municipal assets. Since 2015, Essential Utilities has expanded utility operations by completing many water and wastewater acquisitions, adding more than 129,000 customers. WTRG’s pending seven acquisitions, when completed, will add 213,000 customers to its existing base.The company’s long-term earnings growth rate is 6.58%. The Zacks Consensus Estimate for 2025 EPS implies year-over-year growth of 7.6%.In December 2024, California Water Service Group’s CWT subsidiary, Hawaii Water Service, finalized an agreement to acquire Kukui’ula South Shore Community Services’ wastewater system assets. In May 2024, California Water Service completed the acquisition of Kings Mountain Park Mutual Water Company's water system assets. The acquisition of assets near its existing property will increase the reliability of the water supply and firefighting capabilities of California Water Service.CWT’s long-term earnings growth rate is 42.44%. The Zacks Consensus Estimate for 2025 sales implies a year-over-year decline of 9.8%.AWK’s Stock Price PerformanceIn the past three months, shares of the company have risen 16.3% compared with the industry’s 15.5% growth. Image Source: Zacks Investment ResearchAWK’s Zacks RankAmerican Water Works currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 American Water Works Company, Inc. (AWK): Free Stock Analysis Report California Water Service Group (CWT): Free Stock Analysis Report Middlesex Water Company (MSEX): Free Stock Analysis Report Essential Utilities Inc. (WTRG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks