American Water Works Company, Inc. (AWK) AI Stock Analysis

American Water Works Company, Inc., founded in 1886 and headquartered in Camden, New Jersey, provides water and wastewater services across 14 states, serving around 3.4 million active customers in 1,600 communities. Its customer base includes residential households, commercial businesses, industrial manufacturers, public sector facilities, and military installations. The company operates approximately 80 surface water treatment plants, 490 groundwater treatment plants, 175 wastewater treatment plants, and 53,500 miles of mains and pipes. Additionally, it oversees 1,100 groundwater wells, 1,700 pumping stations, 1,100 treated water storage facilities, and 73 dams, delivering services to approximately 14 million people across 24 states.

Between FY2021 and FY2025, annual revenue expanded from $3.93B to $5.14B, generating a 5-year revenue CAGR of 6.4%. Net income grew from $820.0M in FY2022 to $1.11B in FY2025, with EPS increasing from $4.43 to $5.71 over that period. Operating margin improved from 30.4% in FY2021 to 36.6% in FY2025, though gross margin contracted to 43.3% in FY2025 from 60.3% in FY2024. Over the trailing twelve months ended June 30, 2026, revenue stood at $5.28B with an operating margin of 40.7% and a profit margin of 21.3%. For the latest quarter, quarterly revenue rose 6.2% year-over-year while quarterly earnings expanded 8.6%.

As of June 30, 2026, American Water Works held $191.0M in cash and short-term investments against $16.06B in total debt, resulting in net debt of $15.87B and a debt-to-equity ratio of 1.38. The current ratio stood at 0.52 against total assets of $36.45B and shareholders' equity of $11.66B. In FY2025, operating cash flow reached $2.06B, but capital expenditures of $3.13B resulted in free cash flow of -$1.07B. The company also distributed $633.0M in dividends in FY2025.

At a last close of $134.94, American Water Works trades at a trailing P/E of 23.4x and a forward P/E of 20.0x, both above the median of its S&P 500 Utilities peers of 20.9x and 16.0x, respectively. Its price-to-sales ratio of 5.1x and EV/EBITDA of 14.0x also compare to peer medians of 2.9x and 12.2x. Over the past year, the stock returned -3.2% compared to a 16.8% return for the S&P 500 (SPY), and its 5-year return of -12.3% trails the index's 83.0% gain.

American Water Works has paid dividends for 19 consecutive years, yielding 2.65% based on an annual forward dividend of $3.58. The company's payout ratio is 59.4%, and dividends grew at an annualized rate of 8.6% over the past 5 years. Distributions are paid quarterly, with the last ex-dividend date on August 11, 2026.

Wall Street coverage consists of 3 Strong Buy, 9 Hold, and 1 Sell ratings. The mean price target of $140.64 implies a 4.2% upside from the last close of $134.94. For the fiscal year ending December 31, 2026, analysts estimate revenue of $5.41B and EPS of $6.08, implying 7.9% EPS growth. Over the last 4 quarters, the company delivered 2 EPS beats. The next earnings date is scheduled for October 28, 2026.

This page is an AI-written research summary of American Water Works Company, Inc. (AWK). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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