American Water (NYSE:AWK) Works AWK announced that its unit Virginia American Water will install more than 1,700 feet of new water main in Alexandria to replace old water mains. The company will invest $1.2 million in the replacement, which will improve customer reliability, reduce service disruptions and increase water flows for firefighting. The company will upgrade aging 6-inch and 8-inch water lines with a new, 12-inch ductile iron main.
Replacement of the aging water mains is quite essential to ensure water quality and system pressures as well as increase system resiliency. Virginia American Water regularly invests to upgrade, maintain and expand the existing water and wastewater infrastructure. It provides high-quality and reliable water services to nearly 325,000 million people.
Virginia American Water keeps on investing in its aging infrastructure to upgrade and maintain the same. On Feb 10, 2021, the company made a decision and invested $823,900 to upgrade 2,120 feet of aging water main in Alexandria.
Aging Infrastructure a Concern
Water and wastewater pipelines used by service providers have become old and are rapidly reaching the end of effective service life. As a consequence, pipeline breaks occur and result in the wastage of 6 billion gallons of potable water each day, adding to the loss of water utility operators.
The investor-owned utilities supply a negligible volume of potable water to the customers across the United States. The government-owned systems account for nearly 84% of all community water systems and around 98% of all community wastewater systems. The government is also investing to restore the quality of water and wastewater infrastructure of the United States. The American Jobs Plan has provisions for $111 billion in water and wastewater infrastructure upgrade.
Systematic Investment Essential for Water Industry
Per the findings of the American Society of Civil Engineers, water main breaks occur every two minutes in the United States due to the aging of the existing water infrastructure. Upgrading the massive network of pipelines will require huge systematic investments. Per the U.S. Environmental Protection Agency, a $750-billion investment is necessary to maintain and expand drinking water as well as wastewater services to meet demand over the next 20 years.
American Water Works has plans to invest $10.4 billion between 2021 and 2025 and $22-$25 billion in the next decade to upgrade as well as strengthen its existing water and wastewater infrastructure.
Other water utilities like Essential Utilities (NYSE:WTRG) WTRG has plans to invest $3 billion through 2023 to upgrade its water and natural gas infrastructure. California Water Service (NYSE:CWT) Group CWT has plans to invest in the range of $270 million to $300 million in 2021 and Middlesex Water Company (NASDAQ:MSEX) MSEX has plans to invest $314 million through 2023 in its water and wastewater infrastructure to provide high-quality services to customers.
Price Performance
Shares of American Water have outperformed the industry in the past six months.
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Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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American Water Works Company, Inc. (AWK): Free Stock Analysis Report
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