AMERICAN WATER WORKS CO INC (AWK) Stock Fundamental Analysis
NYSE:AWK - New York Stock Exchange, Inc. - US0304201033 - Common Stock - Currency: USD
Overall AWK gets a fundamental rating of 3 out of 10. We evaluated AWK against 14 industry peers in the Water Utilities industry. While AWK is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, AWK is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
AWK had positive earnings in the past year.
In the past year AWK had a positive cash flow from operations.
AWK had positive earnings in each of the past 5 years.
Each year in the past 5 years AWK had a positive operating cash flow.
1.2 Ratios
AWK has a Return On Assets of 3.23%. This is comparable to the rest of the industry: AWK outperforms 57.14% of its industry peers.
With a decent Return On Equity value of 10.17%, AWK is doing good in the industry, outperforming 71.43% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.34%, AWK is doing good in the industry, outperforming 71.43% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AWK is in line with the industry average of 5.08%.
The last Return On Invested Capital (4.34%) for AWK is above the 3 year average (4.11%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROIC | 4.34% |
ROA(3y)3.09%
ROA(5y)3.39%
ROE(3y)10.16%
ROE(5y)11.75%
ROIC(3y)4.11%
ROIC(5y)4.07%
1.3 Margins
With a decent Profit Margin value of 22.24%, AWK is doing good in the industry, outperforming 71.43% of the companies in the same industry.
AWK's Profit Margin has improved in the last couple of years.
AWK's Operating Margin of 36.61% is fine compared to the rest of the industry. AWK outperforms 71.43% of its industry peers.
AWK's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| GM | N/A |
OM growth 3Y6.42%
OM growth 5Y1.75%
PM growth 3Y-11.29%
PM growth 5Y5.46%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AWK is destroying value.
Compared to 1 year ago, AWK has about the same amount of shares outstanding.
AWK has more shares outstanding than it did 5 years ago.
AWK has a worse debt/assets ratio than last year.
2.2 Solvency
AWK has an Altman-Z score of 1.11. This is a bad value and indicates that AWK is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.11, AWK is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Debt/Equity ratio of 1.36 is on the high side and indicates that AWK has dependencies on debt financing.
AWK has a worse Debt to Equity ratio (1.36) than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.11 |
ROIC/WACC0.47
WACC9.2%
2.3 Liquidity
A Current Ratio of 0.49 indicates that AWK may have some problems paying its short term obligations.
AWK has a Current ratio of 0.49. This is amonst the worse of the industry: AWK underperforms 85.71% of its industry peers.
AWK has a Quick Ratio of 0.49. This is a bad value and indicates that AWK is not financially healthy enough and could expect problems in meeting its short term obligations.
AWK has a worse Quick ratio (0.44) than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.52% over the past year.
The Earnings Per Share has been growing slightly by 7.98% on average over the past years.
The Revenue has grown by 11.79% in the past year. This is quite good.
Measured over the past years, AWK shows a small growth in Revenue. The Revenue has been growing by 5.35% on average per year.
EPS 1Y (TTM)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
3.2 Future
The Earnings Per Share is expected to grow by 7.29% on average over the next years.
Based on estimates for the next years, AWK will show a small growth in Revenue. The Revenue will grow by 7.26% on average per year.
EPS Next Y8.88%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
EPS Next 5Y7.29%
Revenue Next Year8.55%
Revenue Next 2Y7.33%
Revenue Next 3Y7.37%
Revenue Next 5Y7.26%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 26.06, the valuation of AWK can be described as expensive.
64.29% of the companies in the same industry are cheaper than AWK, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.21, AWK is valued at the same level.
AWK is valuated rather expensively with a Price/Forward Earnings ratio of 22.68.
64.29% of the companies in the same industry are cheaper than AWK, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.70. AWK is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.06 | ||
| Fwd PE | 22.68 |
4.2 Price Multiples
64.29% of the companies in the same industry are more expensive than AWK, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.94 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AWK may justify a higher PE ratio.
PEG (NY)2.94
PEG (5Y)3.26
EPS Next 2Y8.1%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
AWK has a Yearly Dividend Yield of 2.39%.
AWK's Dividend Yield is slightly below the industry average, which is at 3.44.
Compared to an average S&P500 Dividend Yield of 2.42, AWK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
On average, the dividend of AWK grows each year by 9.01%, which is quite nice.
AWK has been paying a dividend for at least 10 years, so it has a reliable track record.
AWK has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.01%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
AWK pays out 55.65% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of AWK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.65%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
NYSE:AWK (7/2/2025, 3:53:09 PM)
140.48
-2.08 (-1.46%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners94.11%
Inst Owner Change1.25%
Ins Owners0.08%
Ins Owner Change4.96%
Market Cap27.40B
Analysts55.65
Price Target145.68 (3.7%)
Short Float %2.86%
Short Ratio4.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Yearly Dividend3
Dividend Growth(5Y)9.01%
DP55.65%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.25%
Min EPS beat(2)-3.67%
Max EPS beat(2)6.16%
EPS beat(4)1
Avg EPS beat(4)-1.74%
Min EPS beat(4)-4.73%
Max EPS beat(4)6.16%
EPS beat(8)4
Avg EPS beat(8)1.5%
EPS beat(12)6
Avg EPS beat(12)0.99%
EPS beat(16)8
Avg EPS beat(16)-0.24%
Revenue beat(2)2
Avg Revenue beat(2)6.49%
Min Revenue beat(2)5.74%
Max Revenue beat(2)7.23%
Revenue beat(4)4
Avg Revenue beat(4)5.3%
Min Revenue beat(4)2.04%
Max Revenue beat(4)7.23%
Revenue beat(8)8
Avg Revenue beat(8)4.06%
Revenue beat(12)10
Avg Revenue beat(12)2.48%
Revenue beat(16)10
Avg Revenue beat(16)0.22%
PT rev (1m)-0.45%
PT rev (3m)4.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.27%
EPS NY rev (1m)0.13%
EPS NY rev (3m)0.1%
Revenue NQ rev (1m)-2.88%
Revenue NQ rev (3m)1.51%
Revenue NY rev (1m)-1.18%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.06 | ||
| Fwd PE | 22.68 | ||
| P/S | 5.69 | ||
| P/FCF | N/A | ||
| P/OCF | 13.74 | ||
| P/B | 2.6 | ||
| P/tB | 2.92 | ||
| EV/EBITDA | 15.94 |
EPS(TTM)5.39
EY3.84%
EPS(NY)6.19
Fwd EY4.41%
FCF(TTM)-4.11
FCFYN/A
OCF(TTM)10.23
OCFY7.28%
SpS24.69
BVpS54.02
TBVpS48.15
PEG (NY)2.94
PEG (5Y)3.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.23% | ||
| ROE | 10.17% | ||
| ROCE | 5.74% | ||
| ROIC | 4.34% | ||
| ROICexc | 4.36% | ||
| ROICexgc | 4.52% | ||
| OM | 36.61% | ||
| PM (TTM) | 22.24% | ||
| GM | N/A | ||
| FCFM | N/A |
ROA(3y)3.09%
ROA(5y)3.39%
ROE(3y)10.16%
ROE(5y)11.75%
ROIC(3y)4.11%
ROIC(5y)4.07%
ROICexc(3y)4.14%
ROICexc(5y)4.11%
ROICexgc(3y)4.32%
ROICexgc(5y)4.32%
ROCE(3y)5.41%
ROCE(5y)5.39%
ROICexcg growth 3Y4.46%
ROICexcg growth 5Y-0.91%
ROICexc growth 3Y4.79%
ROICexc growth 5Y-0.15%
OM growth 3Y6.42%
OM growth 5Y1.75%
PM growth 3Y-11.29%
PM growth 5Y5.46%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.36 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.55 | ||
| Cap/Depr | 342.53% | ||
| Cap/Sales | 58.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.32% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 1.11 |
F-Score6
WACC9.2%
ROIC/WACC0.47
Cap/Depr(3y)360.71%
Cap/Depr(5y)332.23%
Cap/Sales(3y)60.79%
Cap/Sales(5y)55.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.52%
EPS 3Y9.93%
EPS 5Y7.98%
EPS Q2Q%9.68%
EPS Next Y8.88%
EPS Next 2Y8.1%
EPS Next 3Y7.49%
EPS Next 5Y7.29%
Revenue 1Y (TTM)11.79%
Revenue growth 3Y6.02%
Revenue growth 5Y5.35%
Sales Q2Q%12.96%
Revenue Next Year8.55%
Revenue Next 2Y7.33%
Revenue Next 3Y7.37%
Revenue Next 5Y7.26%
EBIT growth 1Y14.85%
EBIT growth 3Y12.83%
EBIT growth 5Y7.19%
EBIT Next Year66.78%
EBIT Next 3Y27.09%
EBIT Next 5Y18.33%
FCF growth 1Y30.95%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y60.94%
OCF growth 3Y12.38%
OCF growth 5Y8.14%