American Water Works Co Inc (AWK) stock analysis
American Water Works Co Inc (AWK) clears 5 of this site's 8 mechanical value filters, 3 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. A free-cash-flow DCF does not fit utilities companies, so no margin of safety is shown. Its earnings quality rates Strong and it returns +2.2% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does American Water Works Co do?
American Water Works is the largest US regulated water utility, supplying drinking water and wastewater services in many states.
What stands out about American Water Works Co?
- Misses 1 of the 8 value filters. It fails PEG Ratio < 1.5 (5.83); the other 5 pass and 2 were not evaluated. See every filter.
- Weakest against peers: P/E ratio. At 24.1× (peer median 21.2×) it ranks 28th of 31 among utilities stocks this site tracks. See the ranking.
- Short interest is elevated. 7.0% of the float is sold short, 7.5 days to cover, above this site's 5% flag. See the figures.
- Dividend raises 1 of 6 flags. Its trailing yield is 2.42%. See the Sustainable Dividend Screener.
How has American Water Works Co's share price moved?
The interactive price chart needs JavaScript.
Is American Water Works Co undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) n/a (Utilities)
- P/E vs. its own history 24.1x · near the cheap end Real range: 22.9x–33.8x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Hold · 3.42/5 19 analysts this month: 2 strong buy, 5 buy, 11 hold, 1 sell, 0 strong sell (Finnhub).
- Altman Z″-Score (bankruptcy risk) n/a (Utilities)
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.77 · accruals −2.8% of assets · 192% of profit arrived as cash · stock comp 0.6% of revenue · share count +0.5% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +2.2% net Latest fiscal year (2025): dividends 2.3% + buybacks 0.0% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count rose 10%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $24.05 per $1 of new profit · Capital-hungry · but only 5% return on capital Operating profit $1.1B → $1.7B, capital needed $23B → $36B, 2016–2025 (3-year averages); return on capital now 5% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 5.83 · Well above fair P/E 24.1× ÷ 4.1% a year of growth behind it. 418th lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, price Capital-light growth: not cleared (profit grew 1.5×, under 2×); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): not cleared (PEG 5.83, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Munger's Inversion Check 1 flag
- Standing vs. sector peers 3 of 6 measures above the median Compared with the 30 other utilities stocks this site tracks: 2 in the top third, 2 in the bottom third.
- Dividend payout sustainability 1/6 flags
How does American Water Works Co compare with its peers?
3 of 6 measures sit above the median of the 30 other utilities stocks tracked here, 2 in the top third and 2 in the bottom third.
- P/E ratiolower is cheaper · peer median 21.2× 24.1× ✕28th of 31
- Return on equityhigher is better · peer median 10% 10% –15th of 31
- Net marginhigher is better · peer median 14.1% 21.4% ✓4th of 31
- Revenue growthhigher is better, year on year · peer median 7.5% 6.9% –17th of 31
- Debt / equitylower is safer · peer median 1.77 1.37 ✓6th of 31
- Dividend yieldamong dividend payers · peer median 3.01% 2.42% ✕25th of 31
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and AWK doesn't clear enough of it yet. In its favor: AWK and has kept that profitability up over five years, not just this year, converts sales into profit at healthy margins, and has grown earnings per share at a solid clip over five years. Where it comes up short: AWK isn't clearing the return-on-equity bar he'd want to see right now, carries more debt relative to equity than he typically tolerates, doesn't cover its interest expense as comfortably as he'd want, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✕
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✓
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
Lynch looked for growth stories that weren't overpriced for that growth, and AWK falls short of his bar. In its favor: AWK is growing at the modest, GDP-ish pace typical of a slow grower. Where it comes up short: AWK doesn't pay much of a dividend, which is the main reason to own a slow grower in the first place, carries more debt than he liked to see, even allowing for the extra room a large, stable business gets, is priced too rich for how little growth is actually left in the business, and trades expensive relative to the cash it actually generates.
- Dividend yield > 2.5% ✕
- EPS growth 0%-10% ✓
- Debt/Equity < 0.6 ✕
- P/E < 20 ✕
- Price/FCF < 25 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does American Water Works Co pass?
- Market Cap > $25B $27.2B
- Trailing P/E < 25 24.13
- PEG Ratio < 1.5 5.83
- Price/Book < 8 2.33
- Price/Sales < 7 5.15
- EPS Growth YoY > -5% +8.4%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is American Water Works Co's margin of safety?
A standard free-cash-flow DCF doesn't fit how utilities companies report cash flow.
Where is American Water Works Co in its 52-week range?
What is the short interest in American Water Works Co?
13,783,891 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with American Water Works Co? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case n/a (Utilities)
- Short interest under 5% of float 7.0%
- Passes most of the 6 fundamental filters 5/6 passed
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have American Water Works Co shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from AWK's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do American Water Works Co's 10-year financials show?
From AWK's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about American Water Works Co
What kind of company is American Water Works Co?
American Water Works is the largest US regulated water utility, supplying drinking water and wastewater services in many states. This site groups it with Utilities stocks.
Why does American Water Works Co have no margin of safety on this site?
This site's DCF values a company from its free cash flow, and that does not fit regulated utilities, which reinvest nearly all of their operating cash flow, so free cash flow per share is tiny next to the share price. So AWK gets no margin of safety; judge it on the other checks on this page, such as its filters, shareholder yield and ranking against its peers. The method is in the Intrinsic Value Calculator.
How many of this site's 8 value filters does American Water Works Co pass?
AWK passes 5 of 8. It passes Market Cap > $25B ($27.2B), Trailing P/E < 25 (24.13), Price/Book < 8 (2.33), Price/Sales < 7 (5.15) and EPS Growth YoY > -5% (+8.4%). It misses PEG Ratio < 1.5 (5.83). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
How much cash does American Water Works Co return to shareholders?
AWK's net shareholder yield is +2.2%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2025): dividends 2.3% + buybacks 0.0% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count rose 10%. Its trailing dividend yield is 2.42%, paid out of 9080% of its free cash flow; the dividend-sustainability check raises 1 of 6 flags (a high cash-flow payout). See Shareholder Yield Leaders and the Sustainable Dividend Screener.
When does American Water Works Co report earnings next?
American Water Works Co's next earnings report is expected on October 28, 2026 after the market closes, with analysts expecting earnings of $2.08 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 2 times, by an average of −1.8%.
How heavily is American Water Works Co stock sold short?
As of September 30, 2026, 7.0% of AWK's float was sold short (13,783,891 shares, 7.5 days to cover), up 4.6% from the prior reporting period. FINRA publishes short interest twice a month, so it changes about every two weeks; this site flags anything above 5% of the float.
Where do these numbers come from?
- Financial statements: American Water Works Co's 10-K annual report for the year ended Dec 31, 2025, filed Feb 18, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this American Water Works Co Inc analysis
This page shows every value-investing check the site runs on American Water Works Co Inc (AWK) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.