# American Water Works (AWK.US)

Canonical: https://gigainvestors.com/s/AWK

Analysis as of: 2026-10-16T07:26:42.273Z. Financial observations: FY2005–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $133.04 per share; close as of 2026-10-15.

Estimated value: low $70.64 per share, central $90.21 per share, high $105.34 per share. Buy at or below the central value $90.21 per share. Valuation as of 2026-10-16T07:26:42.273Z; scenarios are not confidence intervals.

Expected annual return: 7.8% at the stated quote. About 7.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.06×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.37×

- FY2018: 0.32×

- FY2019: 0.34×

- FY2020: 0.33×

- FY2021: 0.30×

- FY2022: 0.34×

- FY2023: 0.36×

- FY2024: 0.37×

- FY2025: 0.37×

- LTM to Jun 2026: 0.37×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 9.9pp below the typical margin (limit 4pp)

- ROIC, median of available years: 5.8%

- ROIC, second-lowest year: 5.5%

- Typical minus recent gross margin: 9.9 pp

- Typical gross margin (annual median): 57.1%

- Recent gross margin (lower of latest and 3-year median): 47.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 55.9%

- ROIC including acquisitions, ten-year median: 1.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.0%

- FY2018: 6.2%

- FY2019: 6.4%

- FY2020: 6.2%

- FY2021: 5.4%

- FY2022: 5.5%

- FY2023: 5.7%

- FY2024: 5.8%

- FY2025: 5.8%

- LTM to Jun 2026: 5.8%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.57×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.0B

- Net income, five-year total: $5.2B

- Return on incremental invested capital: 4.9%

- Working capital / revenue, annual change: 1.0 pp

- Working capital / revenue, change between three-year averages: 5.9 pp

- Working capital / revenue, final three-year average: 16.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.64×

- FY2022: -1.16×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 6.4% vs 5.8%

- Per-share earnings: 2.61 to 5.39 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.8%

- Ordinary dilution, 5-year annual growth: 1.4%

- Market cap gain: $12B

- Cumulative retained earnings: $3.4B

- Diluted shares, 10-year annual growth: 0.8%

- Diluted shares, 5-year annual growth: 1.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 9.5%

- Per-share value change: $2.78

- Per-share value, starting three-year median: $2.61

- Per-share value, ending three-year median: $5.39

- Buybacks concentrated in cheaper years (correlation): 0.70

- Average buyback yield: 0.3%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: $362M

- Cumulative net income, 10 years: $8.0B

- ROIC, first three-year median: 6.4%

- ROIC, last three-year median: 5.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.61

- FY2017: $2.38

- FY2018: $3.15

- FY2019: $3.43

- FY2020: $3.90

- FY2021: $6.94

- FY2022: $4.51

- FY2023: $4.89

- FY2024: $5.39

- FY2025: $5.70

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: -2.6%

- Receivables to sales index (DSRI): 1.97×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.85×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.11×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -4.4%

- FY2017: -5.3%

- FY2018: -3.9%

- FY2019: -3.4%

- FY2020: -2.9%

- FY2021: -0.7%

- FY2022: -1.0%

- FY2023: -3.1%

- FY2024: -3.0%

- FY2025: -2.6%

## Holders

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 30% since Dec 2021 · "Statutory earnings fell 7.5% short of analyst forecasts, reaching US$1.00 per share." (finance.yahoo.com, May 2026) · sales +2.8%

Story as of 2026-10-16T09:58:21.114Z; price observation 2026-10-15.

Price needs cash profits to grow 8.7% a year for ten years

- 2025-07-01: California American Water Files Rate Request Driven by Approximately $750 Million in Infrastructure Improvements ([finance.yahoo.com](https://finance.yahoo.com/news/california-american-water-files-rate-201500356.html))

- 2026-06-11: American Water Works Funds 8% Dividend Hike Through State-Regulated Rate Increases This Year ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/american-water-works-funds-8-182238856.html))

- 2026-07-16: PUC Approves Rate Adjustment for Pennsylvania American Water ([finance.yahoo.com](https://finance.yahoo.com/economy/policy/articles/puc-approves-rate-adjustment-pennsylvania-205000429.html))

### Sales · FY2025–2026

sales +2.8%; source https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm; observed 2026-02-18.

- FY2017: $3.4B 

- FY2018: $3.4B 

- FY2019: $3.6B 

- FY2020: $3.8B 

- FY2021: $3.9B 

- FY2022: $3.8B 

- FY2023: $4.2B 

- FY2024: $4.7B 

- FY2025: $5.1B 

- FY2026: $5.3B 

### Gross margin · FY2026

gross margin 47.2%; source https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm; observed 2026-02-18.

- FY2017: 59.0% 

- FY2018: 57.0% 

- FY2019: 57.2% 

- FY2020: 57.1% 

- FY2021: 54.8% 

- FY2022: 58.1% 

- FY2023: 59.4% 

- FY2024: 60.3% 

- FY2025: 43.3% 

- FY2026: 47.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities regulated water; annual sales are USD 5.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm (filed 2026-02-18); FY2025: revenue 5140000000; grossProfit 2227000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AWK.US: 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. The company 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. In addition, it offers water and wastewater services to 14 states serving approximately 3.6 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. The company was founded in 1886 and is headquartered in Camden, New Jersey.

### Why customers stay

Margins ranged from 43.3% to 60.3% during 2023–25; it earns 5.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: grossProfit / revenue = 59.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: grossProfit / revenue = 60.3%.

- Source: https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm (filed 2026-02-18); FY2025: grossProfit / revenue = 43.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); 10-year return on capital observations [[2017,0.0698020226259856],[2018,0.06198727440472037],[2019,0.06435574300828914],[2020,0.062085735840922564],[2021,0.05384775525627224],[2022,0.05474310920470459],[2023,0.05716573624818289],[2024,0.05751178396934248],[2025,0.05774046553181014],[2026,0.05824350232989246]]; median 0.0579919839308513. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Earns 4.9% on new investment; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2016: growth capex 618568436.7193781; upkeep 776431563.2806219; owner earnings 161568436.7193781. Growth capex / owner earnings = 3.8285227565439985.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2019: growth capex 813619821.2854953; upkeep 944380178.7145047; owner earnings 258619821.28549528. Growth capex / owner earnings = 3.1460072056399926.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2020: growth capex 827084244.6912127; upkeep 1100915755.3087873; owner earnings 212084244.69121265. Growth capex / owner earnings = 3.8997910754540905.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2021: growth capex 783697147.2637384; upkeep 1089302852.7362616; owner earnings 809697147.2637384. Growth capex / owner earnings = 0.9678892285987872.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: growth capex 2030000000; upkeep 704000000; owner earnings 944000000. Growth capex / owner earnings = 2.1504237288135593.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: growth capex 2068000000; upkeep 788000000; owner earnings 1051000000. Growth capex / owner earnings = 1.9676498572787822.

- Source: https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm (filed 2026-02-18); FY2025: growth capex 2232000000; upkeep 894000000; owner earnings 1111000000. Growth capex / owner earnings = 2.009000900090009.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Incremental return on capital 0.04856393763943393, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Dividend observations: [[2016,261000000],[2017,289000000],[2018,319000000],[2019,353000000],[2020,389000000],[2021,428000000],[2022,467000000],[2023,532000000],[2024,585000000],[2025,633000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AWK.US SharesStats.PercentInsiders = 0.116 percentage points; cache date 2026-10-16.

### What could break it

"Seasonality could adversely affect the volume of water sold and our revenues." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm (filed 2026-02-18); Seasonality could adversely affect the volume of water sold and our revenues.

### What the price says

The price assumes cash profits grow 8.7% yearly over ten years; actual growth was 14%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Ten-year compound average after fade. Initial solved rate 0.11143014002458507. Price 133.04; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.5320348318588985 → FY2025 5.697435897435898. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $74.04 per share

- 2016-11: $72.47 per share

- 2016-12: $72.36 per share

- 2017-01: $73.44 per share

- 2017-02: $78.00 per share

- 2017-03: $77.77 per share

- 2017-04: $79.76 per share

- 2017-05: $78.18 per share

- 2017-06: $77.95 per share

- 2017-07: $81.10 per share

- 2017-08: $80.90 per share

- 2017-09: $80.91 per share

- 2017-10: $87.76 per share

- 2017-11: $91.56 per share

- 2017-12: $91.49 per share

- 2018-01: $83.17 per share

- 2018-02: $79.36 per share

- 2018-03: $82.13 per share

- 2018-04: $86.58 per share

- 2018-05: $83.14 per share

- 2018-06: $85.38 per share

- 2018-07: $88.25 per share

- 2018-08: $87.53 per share

- 2018-09: $87.97 per share

- 2018-10: $88.53 per share

- 2018-11: $95.41 per share

- 2018-12: $90.77 per share

- 2019-01: $95.67 per share

- 2019-02: $101.62 per share

- 2019-03: $104.26 per share

- 2019-04: $108.19 per share

- 2019-05: $113.02 per share

- 2019-06: $116.00 per share

- 2019-07: $114.78 per share

- 2019-08: $127.32 per share

- 2019-09: $124.23 per share

- 2019-10: $123.27 per share

- 2019-11: $121.03 per share

- 2019-12: $122.85 per share

- 2020-01: $136.20 per share

- 2020-02: $123.66 per share

- 2020-03: $119.56 per share

- 2020-04: $121.69 per share

- 2020-05: $127.00 per share

- 2020-06: $128.66 per share

- 2020-07: $147.27 per share

- 2020-08: $141.34 per share

- 2020-09: $144.88 per share

- 2020-10: $150.51 per share

- 2020-11: $153.38 per share

- 2020-12: $153.47 per share

- 2021-01: $159.02 per share

- 2021-02: $141.88 per share

- 2021-03: $149.92 per share

- 2021-04: $155.99 per share

- 2021-05: $155.02 per share

- 2021-06: $154.13 per share

- 2021-07: $170.11 per share

- 2021-08: $182.25 per share

- 2021-09: $169.04 per share

- 2021-10: $174.18 per share

- 2021-11: $168.57 per share

- 2021-12: $188.86 per share

- 2022-01: $160.80 per share

- 2022-02: $151.09 per share

- 2022-03: $165.53 per share

- 2022-04: $154.08 per share

- 2022-05: $151.25 per share

- 2022-06: $148.77 per share

- 2022-07: $155.44 per share

- 2022-08: $148.45 per share

- 2022-09: $130.16 per share

- 2022-10: $145.34 per share

- 2022-11: $151.76 per share

- 2022-12: $152.42 per share

- 2023-01: $156.49 per share

- 2023-02: $140.38 per share

- 2023-03: $146.49 per share

- 2023-04: $148.25 per share

- 2023-05: $144.45 per share

- 2023-06: $142.75 per share

- 2023-07: $147.43 per share

- 2023-08: $138.74 per share

- 2023-09: $123.83 per share

- 2023-10: $117.65 per share

- 2023-11: $131.84 per share

- 2023-12: $131.99 per share

- 2024-01: $124.02 per share

- 2024-02: $118.54 per share

- 2024-03: $122.21 per share

- 2024-04: $122.32 per share

- 2024-05: $130.77 per share

- 2024-06: $129.16 per share

- 2024-07: $142.36 per share

- 2024-08: $143.12 per share

- 2024-09: $146.24 per share

- 2024-10: $138.11 per share

- 2024-11: $136.94 per share

- 2024-12: $124.49 per share

- 2025-01: $124.64 per share

- 2025-02: $135.97 per share

- 2025-03: $147.52 per share

- 2025-04: $147.01 per share

- 2025-05: $142.97 per share

- 2025-06: $139.11 per share

- 2025-07: $140.24 per share

- 2025-08: $143.51 per share

- 2025-09: $139.19 per share

- 2025-10: $128.43 per share

- 2025-11: $130.07 per share

- 2025-12: $130.50 per share

- 2026-01: $129.13 per share

- 2026-02: $136.03 per share

- 2026-03: $136.09 per share

- 2026-04: $128.42 per share

- 2026-05: $123.27 per share

- 2026-06: $131.58 per share

- 2026-07: $134.17 per share

- 2026-08: $138.23 per share

- 2026-09: $129.47 per share

- 2026-10: $133.04 per share

## Annual estimated value (USD per share)

- FY2016: low $19.17 per share, central $23.77 per share, high $27.73 per share

- FY2017: low $10.82 per share, central $13.32 per share, high $15.54 per share

- FY2018: low $11.31 per share, central $13.79 per share, high $16.03 per share

- FY2019: low $11.61 per share, central $14.44 per share, high $16.85 per share

- FY2020: low $13.69 per share, central $15.22 per share, high $17.26 per share

- FY2021: low $14.80 per share, central $18.57 per share, high $21.65 per share

- FY2022: low $13.74 per share, central $16.78 per share, high $19.55 per share

- FY2023: low $19.92 per share, central $24.40 per share, high $28.25 per share

- FY2024: low $60.22 per share, central $75.85 per share, high $88.48 per share

- FY2025: low $69.97 per share, central $89.37 per share, high $104.37 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:32:19.734Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1410636/000141063626000034/awk-20251231.htm); period 2025-12-31, filed 2026-02-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.