American Water Works (AWK) Expands Scale with Essential Utilities Merger

American Water Works Company, Inc. (NYSE:AWK) is one of the best infrastructure stocks to buy right now. On February 10, shareholders of American Water Works Company, Inc. (NYSE:AWK) and Essential Utilities Inc. (NYSE:WTRG) approved merger-related proposals at special meetings held that day.

According to American Water, at least 99% of its shares present voted to approve share issuance for the merger. Nearly 95% of Essential Utilities shares voted in favor of the merger agreement.

The all-stock, tax-free merger, announced October 26, 2025, combines the two largest US regulated water and wastewater utilities into one serving over 4.7 million connections across 17 states. The combined company will retain the American Water name and will be headquartered in Camden, New Jersey. Closing is expected by the end of Q1 2027, subject to Hart-Scott-Rodino antitrust clearance, public utility commission approvals in multiple states, including Pennsylvania and New Jersey, and other conditions.

Separately, on January 12, 2026, BofA Securities lifted American Water stock from Underperform to Neutral and boosted its price target to $139 from $117. BofA highlighted the stock’s depressed pricing versus electric and gas counterparts, where its earnings multiple edge has narrowed from above 140% historically to below 25% currently.

The firm anticipated the ongoing merger would counter issues tied to customer bill burdens and the durability of EPS expansion outlook. BofA contended that American Water’s extended 50-to-100-year pipeline upgrades deserve a valuation lift over electric utilities, which share roughly 9% EPS trajectories but hinge on accelerated construction for data center clients.

American Water Works Company, Inc. (NYSE:AWK) is a regulated water utility that provides drinking water and wastewater services to approximately 14 million people in 24 states. The company operates pipeline infrastructure totaling more than 54,500 miles, serving around 1,700 communities.

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Disclosure: None. This article is originally published at Insider Monkey.