CAMDEN, N.J. - New Jersey American Water (NYSE:AWK) has completed the acquisition of the Borough of Manville's wastewater collection system, adding approximately 4,300 customers to its service base. The transaction, valued at $6.5 million, was finalized following approval by the New Jersey Board of Public Utilities on September 24, 2024.
The acquisition marks the continuation of New Jersey American Water's expansion, with the Manville system being the seventh purchase in the last five years. The company, which has already been providing water service to the majority of these new wastewater customers, has pledged to invest at least $10 million in system improvements over the next decade.
Manville Mayor Richard Onderko endorsed the sale, highlighting the benefits for the community, including municipal debt repayment, property tax stabilization, and secured long-term affordable rates. The company's commitment to infrastructure investment was also emphasized as a key advantage for the residents.
New Jersey American Water, part of the larger American Water (NYSE: AWK) - the nation's largest regulated water and wastewater utility - serves over 2.9 million people in the state. This latest acquisition is part of the company's strategic growth and follows several other recent additions to its portfolio, including the Salem City water and wastewater system and systems in Somerville, Bound Brook, Long Hill Township, Mount Ephraim, and Egg Harbor City.
Residents of Manville are expected to receive further details from New Jersey American Water through mail communications within the next week. Additional information can also be found on the company's website under a dedicated Manville Wastewater page.
This news is based on a press release statement from New Jersey American Water.
In other recent news, American Water reported a rise in earnings per share (EPS) to $1.80 from $1.66 during its third quarter 2024 earnings call. The company reaffirmed its full-year 2024 EPS guidance and projected substantial growth for 2025, fueled by capital investments and strategic acquisitions. The acquisition of Butler Area Sewer Authority added 15,000 customers, contributing to nearly 50,000 new customers in 2024.
American Water's capital investment strategy projects an 8% to 9% rate base growth over the next decade. Regulatory activities include rate cases in multiple states, with decisions expected by December 2024. The company's total debt-to-capital ratio stood at 56%, targeting a dividend payout ratio between 55% and 60%.
For 2025, American Water expects an 8% EPS growth, with guidance set at $5.65 to $5.75 per share. The company plans to invest $17 billion to $18 billion from 2025 to 2029, focusing on compliance with environmental regulations. These are among the many recent developments that demonstrate the company's robust financial health and strategic growth initiatives.
InvestingPro Insights
American Water Works Company (NYSE: AWK), the parent company of New Jersey American Water, demonstrates strong financial health and a commitment to shareholder value. According to InvestingPro data, the company boasts a market capitalization of $26.64 billion, reflecting its significant presence in the water utility sector.
An InvestingPro Tip highlights that American Water has raised its dividend for 11 consecutive years, underlining its dedication to returning value to shareholders. This is particularly relevant in the context of the company's expansion strategy, as evidenced by the recent Manville acquisition. The consistent dividend growth suggests that American Water's acquisitions and investments are translating into tangible benefits for investors.
Another InvestingPro Tip notes that the company has maintained dividend payments for 17 consecutive years, further emphasizing its financial stability and long-term commitment to shareholders. This track record of reliability is likely to be appealing to Manville residents and potential investors alike, as it indicates the company's ability to manage its growth effectively while maintaining financial obligations.
The company's revenue growth of 9.24% over the last twelve months, as reported by InvestingPro, aligns with its expansion narrative. This growth trajectory supports American Water's ability to continue investing in infrastructure improvements, such as the $10 million pledge for the Manville system.
For investors and Manville residents interested in a deeper analysis of American Water's financial health and growth prospects, InvestingPro offers 8 additional tips, providing a comprehensive view of the company's position in the market.
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