Featured in The Wall Street Transcript’s Best CEO Interviews of 2015
American Water Works Company, Inc.
Susan N. Story, President and CEO of American Water Works Company, Inc. (AWK), interviewed with TWST this year’s Alternative Energy & Utilities report. Since then, the stock has increased in price by approximately 20%, from $49 to currently $59 per share.
In the interview, Story discussed the company’s three-pronged growth strategy, what she calls AWK‘s “growth triangle”:
We have industry-leading 7% to 10% long-term EPS growth that we’ve guided the market to. And we show a triangle that very clearly and transparently shows where we plan to get that growth. The base of our growth is the regulated investment into our infrastructure. That’s about 3% to 6%, long term, of that 7% to 10%. That’s replacing the pipes, replacing the pumps, those types of things.
The second is 1% to 2% of that growth will come from regulated acquisitions, and those are the acquisitions of companies or of municipalities similar to, for example, Haddonfield, where we won a referendum last year and closed on this spring. This adds 4,500 water customers and 4,500 wastewater customers to our footprint. It includes two recently announced smaller acquisitions in California. So that’s about 1% to 2% of our growth. 2% to 3% of our growth is from the market-based business, those three areas that I talked about earlier: military services, homeowner services as well as contract services.
And the third is related to an announcement we made in June. We had put in our growth triangle — and if you haven’t seen it, it’s a very clear and transparent way that we show the market where we’re going to grow — 0% to 2% for market-based shale. We say 0% because we are not going to make speculative investments; we aren’t going to invest in a lot of pipelines without customers on the other end.
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