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American Water Works
🇺🇸 AWK · NYSE/NASDAQ
Utilities
Price at analysis: USD 133.99 Current price: USD 132.38 * updated every night
Scores
Key Metrics
Powered by EODHDP/E (TTM)
23.2
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: 133.99 ÷ 5.78 = 23.2
TTM period through: 2026-06-30
Forward P/E (estimated): 20.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 22.5
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
14.0x
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: 2.56%
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): 2.56%
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 |
| Paid | 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 remains a premier regulated utility offering an unshakeable economic moat and highly reliable dividend growth. While the underlying business quality is exceptional, the current premium valuation limits the margin of safety for new capital. Existing holders should maintain their positions as active rate case approvals steadily offset heavy environmental infrastructure costs.
Sector Context
American Water Works operates as a regulated water and wastewater utility. The utility sector is the quintessential DGI essential service, characterized by legal monopolies, highly predictable rate-regulated returns, and stable dividend growth. However, this stability typically comes with structurally elevated debt levels and massive capital expenditure requirements, making valuations highly sensitive to interest rate movements.
Temporary Opportunity Identified
Macroeconomic pressures from elevated inflation and higher-for-longer interest rates are weighing on utility valuations. Additionally, the company faces near-term negative sentiment from a non-material October 2024 cyberattack and immense capex mandates for EPA compliance (though these are recoverable through future rate cases).
📊 Strategy Analysis
- • Unshakeable regulated local water monopoly providing quintessential essential services, shielding the core business from technological obsolescence.
- • Consistent dividend compounder with an 8.6% 5-year CAGR, 8 consecutive years of growth, and zero cuts in the past decade.
- • Strong regulatory tailwinds via Fair Market Value (FMV) legislation and active rate cases, allowing profitable recovery of EPA-mandated infrastructure investments.
- • Multibillion-dollar nationwide class settlements with PFAS manufacturers are providing direct cash recoveries to AWK subsidiaries, materially offsetting remediation costs.
⚠ What to Watch
- • Premium valuation at 23.20x TTM P/E limits the margin of safety for new capital and constrains the forward dividend yield to a modest 2.57%.
- • Massive, multi-decade capital expenditure mandates for EPA PFAS compliance and lead pipe replacement sustain persistent negative free cash flow (-$258M).
- • Elevated leverage with Net Debt/EBITDA at 5.54x increases sensitivity to persistently high interest rates and borrowing costs.
📊 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: 2026-10-17
Disclaimer: This information is for educational purposes only. Not financial advice.