American Water Works

Core profit came in at 2 dollars per share this quarter, up about 6 percent from 1.89 dollars a year ago. Regulators have approved 284 million dollars in new yearly revenue since January, and the company narrowed its 2026 forecast to the top half of its range. It also set a 2027 target of 6.53 to 6.63 dollars per share, which works out to roughly 8 percent growth.

American Water plans to spend more than 48 billion dollars over the next decade replacing old pipes and plants, including 4.1 billion dollars in 2027 alone. Regulators let utilities earn a return on that kind of investment, which is why management expects earnings and dividends to keep growing 7 to 9 percent a year. It also added about 81,000 new customer connections so far this year by buying smaller water systems.

Running a water system is getting pricier. Interest costs rose 32 million dollars over the first nine months because the company keeps borrowing to pay for construction, and operating costs climbed 103 million dollars, partly from pricier purchased water, power, and chemicals. Bad weather also shaved 18 million dollars off revenue this quarter, and the official bottom line was flat at 1.94 dollars per share.

Every price increase needs a regulator's approval, and the company is still waiting on about 360 million dollars in pending requests. The giant merger with Essential Utilities is moving forward, with three states already on board and settlements reached in Pennsylvania, North Carolina, and Texas. But it is not done yet, management is aiming to close by the end of March 2027, and big mergers can bring surprises.