American Water Upgrades Infrastructure - Analyst Blog

American Water Works Company, Inc.'s AWK subsidiary, Pennsylvania American Water, has announced a water infrastructure upgrade program to its EH Aldrich Treatment Plant in Elrama.

Pennsylvania American Water is installing a 42-inch parallel raw water main, filter-to-waste system and additional improvements at the plant. The total cost of this project is estimated at around $5.5 million.

This new filter-to-waste system will enable the filtering process automatically.  The new water main, currently under construction, will run parallel to the existing 42-inch raw water line and act as a back-up in case of emergency, thereby limiting service outages.

Along with the construction of the filter-to-waste system, Pennsylvania American Water will construct a new 100-foot diameter water treatment residual clarifier tank and update the existing one.

This update and construction will be done to avert the effects of freezing during the harsh winter season. Construction of the clarifiers will begin in the latter half of 2014.

American Water Works plans to invest $5.8 billion from 2014 through 2018 in its water and wastewater systems. Systematic investment will help the company to strengthen its infrastructure, replace old assets and efficiently cater to customer needs.

American Water adheres to and complies with regulatory standards and provides uninterrupted and reliable services to its customers. The company, with the help of both organic and inorganic growth strategies, is trying to expand its operations and cope with increased service demand.

American Water Works currently has a Zacks Rank #3 (Hold).

Other Stocks to Consider

However, some better-ranked stocks in the same industry include American States Water Co. AWR, Middlesex Water Co. MSEX and Connecticut Water Service Inc. CTWS. While American States Water and Middlesex Water hold a Zacks Rank #1 (Strong Buy), Connecticut Water Service carries a Zacks Rank #2 (Buy).