American Water Works invests in shareholders, not infrastructure

Every month, American Water Works (WV American Water’s parent company) provides financial information to institutional investors.

In addition to teaching us about how American Water Works is “20x better than industry average for compliance with drinking water quality standards,” this month’s presentation reveals some interesting information about American Water Works’ investment priorities.

As this graph shows, American Water Works has been increasing the dividend paid to its shareholders every year for the past 6 years.
AWK_dividends
Back in February 2009, American Water Works had 160 million shares of stock outstanding, so it was paying out quarterly dividends of $32 million. Today, American Water Works has 178.7 million shares of stock outstanding, so it is paying quarterly dividends of $50 million.

Money that American Water Works pays to its investors is money that American Water Works is not re-investing in its infrastructure. In other words, over the same period that the leakage rate for their WV system increased from 22% to 28% (with the Kanawha Valley district up to 37%), American Water Works’s shareholders have gotten an extra $72 million per year.

1 Comment

  1. […] American Water Works also noted that they will be increasing their dividends to shareholders again this quarter, rather than re-investing in infrastructure. […]

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