American Water Works (AWK)
Utilities · $26.6B market cap · SEC CIK 0001410636
fundamentals score out of 100
Next reports on Oct 28, 2026, with analysts expecting $2.11 in earnings per share.
The case for AWK
- 21% of revenue drops through to net profit.
- Moves less than the market (beta 0.57).
- Pays a modest 2.1% dividend.
The case against
- Burned $1.1B of free cash in FY2025.
- A PEG of 5.9: a P/E of 23.6× is a lot to pay for EPS growing 4%.
- Current liabilities exceed current assets (ratio 0.52).
- P/E of 23.6× is higher than 87% of Utilities companies.
- Price/sales of 5.0× is higher than 87% of Utilities companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Utilities companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 28 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 48 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 46 |
| Momentumhow the price has behaved lately | 54 |
| Stabilityhow violently it moves, what it owes and what it pays you | 77 |
- Each factor except momentum is half fixed thresholds, half rank among the 31 Utilities companies.
Key numbers
| Price / earnings | 23.6× |
|---|---|
| Price / book | 2.20× |
| Price / sales | 5.0× |
| Revenue growth (YoY) | +6.9% |
| EPS growth (YoY) | +4.0% |
| Gross margin | — |
| Operating margin | 37% |
| Net margin | 21% |
| Return on equity | 10% |
| Debt / equity | 1.37× |
| Current ratio | 0.52 |
| Dividend yield | 2.14% |
| Beta | 0.57 |
| 52-week range | $120.57 – $145.64 |
| Position in that range | 53% of the way up |
| 3-month return | +7.1% |
| 1-year return | -0.8% |
Five years of financials, as filed
Pulled from American Water Works's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $5.1B | $4.7B | $4.2B | $3.8B | $3.9B |
| Operating income | $1.9B | $1.7B | $1.5B | $1.3B | $1.2B |
| Net income | $1.1B | $1.1B | $944M | $820M | $1.3B |
| Operating cash flow | $2.1B | $2.0B | $1.9B | $1.1B | $1.4B |
| Capital expenditure | $3.1B | $2.9B | $2.6B | $2.3B | $1.8B |
| Total assets | $35.4B | $32.8B | $30.3B | $27.8B | $26.1B |
| Shareholder equity | $10.8B | $10.3B | $9.8B | $7.7B | $7.3B |
| Cash | $98.0M | $96.0M | $330M | $85.0M | $116M |
| Free cash flow | -$1.1B | -$811M | -$701M | -$1.2B | -$323M |
| Operating margin | 36.7% | 36.9% | 35.7% | 33.8% | 30.6% |
| Net margin | 21.7% | 22.6% | 22.4% | 21.8% | 32.3% |
| Diluted shares | 195M | 195M | 193M | 182M | 182M |
Share count is up 7.1% over 4 years. Mild issuance.
What American Water Works says it does
The Company With a history dating back to 1886, American Water is the largest and most geographically diverse, publicly-traded water and wastewater utility company in the United States, as measured by both operating revenues and population served. A holding company originally incorporated in Delaware in 1936, the Company employs approximately 7,000 professionals who provide drinking water, wastewater and other related services to approximately 14 million people in 24 states. The Company conducts the majority of its business through regulated utilities that provide water and wastewater services, collectively presented as one reportable segment, referred to as the "Regulated Businesses." The Company also operates other businesses that provide water and wastewater services to the U.S. government on military installations, as well as municipalities. Individually, these other businesses do not meet the criteria of a reportable segment in…
Risk factors AWK lists in its 10-K
- Risks Related to Our Industry and Business Operations
- Financial, Economic and Market-Related Risks
- Risks Related to the Proposed Merger with Essential
- Additional Risks Related to Our Business
- variability may cause increased weather volatility and may impact water usage and related revenue or require additional expenditures, all of which may not be fully recoverable in rates or otherwise
- Changes in laws and regulations can significantly and materially affect our business, financial condition, results of operations, cash flows and liquidity
- Regulatory and environmental risks associated with the collection, treatment and disposal of wastewater may impose significant costs and liabilities
- A loss of one or more large industrial or commercial customers could have a material adverse impact upon the results of operations of one or more of our Regulated Businesses
- Aging infrastructure may lead to service disruptions, property damage and increased capital expenditures and O&M expenses and other costs, all of which could negatively impact our financial results
- Seasonality could adversely affect the volume of water sold and our revenues
- We are subject to adverse publicity and reputational risks, which make us vulnerable to negative customer perception and could lead to increased regulatory oversight or sanctions
- The failure of, or the requirement to repair, upgrade or dismantle, any of our dams may adversely affect our financial condition, results of operations, cash flows and liquidity
- Any failure of our network of water and wastewater pipes, water mains and water reservoirs could result in losses and damages that may affect our financial condition and reputation
- We have been, and may in the future be, subject to physical and cyber attacks