American Water Works Company, Inc. (AWK) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Utilities · Utilities - Regulated Water
Is American Water Works Company, Inc. a safe investment right now?
American Water Works Company, Inc. is in the Utilities sector — Altman Z-Score does not apply to this type of company. Our fair value estimate is $138.82 (Watch Zone).
Why the Altman Z-Score does not apply to American Water Works Company, Inc.
The Altman Z-Score is designed for manufacturing and non-financial companies. It uses ratios like Working Capital / Total Assets and Revenue / Total Assets that produce misleading results for Utilities companies.
- Banks hold massive assets (loans) that inflate Total Assets, making WC/TA nearly zero — a false distress signal
- Utilities carry high regulated debt by design — the model misreads leverage as risk
- REITs use Funds From Operations (FFO), not Free Cash Flow — standard cash flow analysis doesn't apply
Altman Z-Score is designed for manufacturing companies and does not apply to banks, utilities, or REITs.
Note: A sector-specific financial health model for Utilities companies is planned for a future update.
What is American Water Works Company, Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Analyst Consensus Target | $138.82 | 11 Wall Street analysts |
| Analyst High / Low | $155.00 / $121.00 | Range of analyst price targets |
| Price / Book | 2.36x | Current market valuation vs book value |
| Return on Equity | 10.5% | Profitability relative to shareholder equity |
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Why standard moat analysis does not apply to American Water Works Company, Inc.
Our standard moat model uses ROIC stability, gross margin trends, and switching costs — metrics designed for product and service companies. Utilities companies compete on fundamentally different dimensions.
- Banks — moat comes from deposit cost advantage, net interest margin stability, and fee income diversification
- Utilities — moat is a regulatory monopoly with guaranteed rate of return on invested capital
- REITs — moat comes from property portfolio quality, location, tenant mix, and cap rate advantages
Standard moat analysis (ROIC/gross margin/switching costs) does not reliably apply to Utilities companies. Banks compete on net interest margin, utilities on regulated returns, and REITs on occupancy and cap rates.
Note: A sector-specific competitive analysis for Utilities companies is planned for a future update.
Is American Water Works Company, Inc.'s dividend safe?
Can American Water Works Company, Inc. afford its dividend?
Payout ratio is 57.1%. FCF covers the dividend -2.8x. 19 consecutive years of payments.
American Water Works Company, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Free Cash Flow | −$1.2B | −$1.0B | −$1.3B | Rising |
Recent events that affect our AWK analysis
AWK earnings report scheduled
Upcoming report. Consensus EPS estimate: $1.10. Revenue estimate: $1.12B. Our current Fair Value: $138.82 — a significant beat or miss could shift this estimate.
AWK analyst consensus: 15% bullish (2 of 13 analysts)
0 Strong Buy, 2 Buy, 10 Hold, 0 Sell, 1 Strong Sell. Consensus target: $138.82 (5.9% upside). Compare with our independent Fair Value: $138.82.
AWK missed EPS estimates by 2.3%
Reported EPS: $1.24 vs estimate $1.27. Our Fair Value of $138.82 may face downward pressure if the trend continues.
AWK paid $0.8280/share dividend
Dividend Safety Grade: B. Payout ratio: 57.1%.
AWK paid $0.8280/share dividend
Dividend Safety Grade: B. Payout ratio: 57.1%.
AWK beat EPS estimates by 3.0%
Reported EPS: $1.94 vs estimate $1.88. Earnings strength supports our Fair Value of $138.82 (5.9% above current price).
AWK paid $0.8280/share dividend
Dividend Safety Grade: B. Payout ratio: 57.1%.
AWK missed EPS estimates by 2.6%
Reported EPS: $1.48 vs estimate $1.52. Our Fair Value of $138.82 may face downward pressure if the trend continues.
AWK paid $0.8280/share dividend
Dividend Safety Grade: B. Payout ratio: 57.1%.
AWK missed EPS estimates by 0.9%
Reported EPS: $1.05 vs estimate $1.06. Our Fair Value of $138.82 may face downward pressure if the trend continues.
AWK beat EPS estimates by 9.2%
Reported EPS: $1.22 vs estimate $1.12. Earnings strength supports our Fair Value of $138.82 (5.9% above current price).
AWK paid $0.7650/share dividend
Dividend Safety Grade: B. Payout ratio: 57.1%.
Common questions about American Water Works Company, Inc.
What is American Water Works Company, Inc. stock price today?
American Water Works Company, Inc. (AWK) stock price is $131.13 as of the latest market close, traded on the NYSE exchange.
What does American Water Works Company, Inc. do?
American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services on military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. It also operates approximately 80 surface water treatment plants; 520 groundwater treatment plants; 170 wastewater treatment plants; 55,000 miles of transmission, distribution, and collection mains and pipes; 1,200 groundwater wells; 1,800 water and wastewater pumping stations; 1,100 treated water storage facilities; and 75 dams.
What is American Water Works Company, Inc. market cap?
American Water Works Company, Inc. has a market capitalization of $25.61B, classifying it as a large-cap stock in the Utilities sector.
What sector and industry is AWK in?
American Water Works Company, Inc. operates in the Utilities sector, specifically within the Utilities - Regulated Water industry. It trades on the NYSE under the ticker symbol AWK.
Is AWK stock overvalued or undervalued?
Based on our valuation model, American Water Works Company, Inc. trades 5.5% below our fair value estimate — potentially undervalued.
- FairValueLabs Fair Value: $138.82
- Current Price: $131.13
- Valuation Zone: Watch Zone
What is AWK stock forecast and analyst target price?
Based on 11 Wall Street analysts, the consensus price target for American Water Works Company, Inc. is $138.82, implying upside of 5.9% from the current price.
- Analyst High Target: $155.00
- Analyst Low Target: $121.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is American Water Works Company, Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for American Water Works Company, Inc.:
- Revenue growth (current year est.): 4.5%
- EPS growth (current year est.): 8.0%
- Revenue growth (next year est.): 7.2%
- EPS growth (next year est.): 7.9%
What are American Water Works Company, Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Free Cash Flow | −$1.2B | Rising |
What is AWK's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 23.1x
- Forward P/E (next 12 months est.): 19.9x
How volatile is AWK stock?
American Water Works Company, Inc. has a beta of 0.73, meaning it is less volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does American Water Works Company, Inc. have?
American Water Works Company, Inc.'s balance sheet shows:
- Total Cash: $153.0M
- Total Debt: $15.93B
- Net Cash Position: $-15.78B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is American Water Works Company, Inc.'s free cash flow?
American Water Works Company, Inc. generated $-2.34B in trailing twelve-month free cash flow (from $2.06B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does American Water Works Company, Inc. pay a dividend, and is it safe?
Yes, American Water Works Company, Inc. pays a regular dividend. Here are the key metrics:
- Dividend Yield: 2.5%
- Payout Ratio: 57.1%
- Consecutive Years Paid: 19
- 5-Year Dividend Growth: -18.9%
- FairValueLabs Safety Grade: B
Is American Water Works Company, Inc. financially healthy?
The Altman Z-Score — the standard bankruptcy prediction model — is not applicable to Utilities companies like American Water Works Company, Inc.. The formula uses ratios designed for manufacturing firms that produce misleading results for banks, utilities, and REITs.
Does American Water Works Company, Inc. have a competitive moat?
Our standard moat model (based on ROIC, gross margins, and switching costs) does not apply to Utilities companies. These firms compete on fundamentally different dimensions such as regulatory advantages, deposit cost structures, or property portfolios.
What is AWK's return on equity (ROE)?
American Water Works Company, Inc.'s return on equity is 10.5%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy AWK stock?
AWK shares can be purchased through any brokerage account that provides access to the NYSE. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol AWK
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is AWK a value stock or speculative?
FairValueLabs classifies American Water Works Company, Inc. as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of American Water Works Company, Inc.?
The current CEO of American Water Works Company, Inc. is Mr. John C. Griffith.
What is AWK's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $5.69
- Forward EPS (next 12 months est.): $6.58
- Analyst consensus EPS (this year): $6.09
- Analyst consensus EPS (next year): $6.58
Other Utilities companies analyzed by FairValueLabs
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
AWK analysis methodology: How we calculate fair value, Z-Scores, and moat ratings