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American Water Works
🇺🇸 AWK · NYSE/NASDAQ · US0304201033
Utilities
USD 135.28 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
23.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 135.28 ÷ 5.78 = 23.6
TTM period through: 2026-06-30
Forward P/E (estimated): 22.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 23.6
Net Debt/EBITDA (TTM)
5.5x
Latest quarter: 19.5x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-06-30
Latest quarter (2026-06-30): 19.5x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
ROE
10.1%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
14.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Dividend Summary
Powered by EODHDDividend Yield (Fwd)
2.70%
TTM: 2.48%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Forward Yield (estimated): 2.70%
Trailing Yield (TTM, last 12 months): 2.48%
Payout Ratio (Fwd)
62.0%
TTM: 58.3%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (Fwd): 62.0%
Payout (TTM): 58.3%
Cash Flow Payout (TTM): 28.2%
FCF Coverage (TTM): -1.57x
Growth Streak
8 yrs
Consec. increases
Div. Growth (5Y)
8.6%
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 11 Aug 2027 | — | USD | 0.895 |
| Forecast* | Quarterly | — | 12 May 2027 | — | USD | 0.895 |
| Forecast* | Quarterly | — | 10 Feb 2027 | — | USD | 0.828 |
| Forecast* | Quarterly | — | 13 Nov 2026 | — | USD | 0.828 |
| Declared | Quarterly | 29 Jul 2026 | 11 Aug 2026 | 01 Sep 2026 | USD | 0.895 |
| Paid | Quarterly | 29 Apr 2026 | 12 May 2026 | 02 Jun 2026 | USD | 0.895 |
| Paid | Quarterly | 05 Dec 2025 | 10 Feb 2026 | 03 Mar 2026 | USD | 0.828 |
| Paid | Quarterly | 28 Oct 2025 | 13 Nov 2025 | 02 Dec 2025 | USD | 0.828 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
American Water Works is a premier regulated utility offering exceptional business quality, an unshakeable economic moat, and a reliable dividend growth history. While the underlying assets are highly defensive and rate cases are actively recovering costs, the current P/E of 23.60x and lower yield make it less compelling for immediate capital deployment. Existing holders should maintain their positions, while new buyers should watch for a valuation pullback.
Sector Context
Utilities - Regulated Water. Water utilities provide a classic essential service characterized by natural monopolies and highly predictable, regulated returns. However, they carry elevated debt loads (acceptable within the sector) and face cyclical free cash flow pressure during heavy infrastructure and regulatory compliance cycles.
Temporary Opportunity Identified
Heavy upfront capital expenditures required for emerging contaminant (PFAS) compliance and infrastructure overhauls are temporarily suppressing free cash flow until related rate case recoveries are fully approved and implemented.
📊 Strategy Analysis
- • Unassailable economic moat as the largest regulated water utility in the US, providing a strict essential service.
- • Consistent dividend growth track record with an 8.6% 5-year CAGR, well-supported by a reasonable forward payout ratio of 61.97%.
- • Visible revenue expansion pathway driven by a $48B–$50B long-term infrastructure investment plan and ongoing rate case approvals.
⚠ What to Watch
- • Current forward dividend yield of 2.53% remains below the typical 3.0% target for new income-focused DGI positions.
- • Massive structural capital expenditure mandates for EPA PFAS compliance and lead pipe replacements are driving persistent negative free cash flow (-$258M).
- • Elevated leverage, with Net Debt/EBITDA at 5.54x, requires continuous access to capital markets to fund necessary environmental infrastructure upgrades.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-08-15
Disclaimer: This information is for educational purposes only. Not financial advice.