American Water Works AWK
American Water Works is the largest water and wastewater utility in the US, operating under a regulated model with rates approved by state agencies. American Water Works shows acceptable financial health (6.45) with an exceptional operating margin of 40.66%, but its high debt (ND/EBITDA of 5.44) and negative free cash flow conversion (-61.29%) weigh on its quality and valuation, which already discounts a P/E of 22.69.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
American Water Works is the largest water and wastewater utility in the US, operating under a regulated model with rates approved by state agencies. American Water Works shows acceptable financial health (6.45) with an exceptional operating margin of 40.66%, but its high debt (ND/EBITDA of 5.44) and negative free cash flow conversion (-61.29%) weigh on its quality and valuation, which already discounts a P/E of 22.69.
Score by category
| Category | Score |
|---|---|
| Financial health | 6.2 |
| Quality / Moat | 4.4 |
| Valuation | 4.0 |
| Growth | 6.0 |
| Dividend | 7.0 |
| Momentum | 4.5 |
| Risk & Context | 7.7 |
OVERALL SCORE: 5.8/10
Context and risks
The rise in 10-year Treasury yields (5.17%) pressures AWK's valuation, a regulated utility with long-duration cash flows and net debt/EBITDA of 5.44. However, its regulated rate model with inflation pass-through clauses and its position as the largest water utility in the US partially mitigate this risk.
News considered in the analysis
- American Water Works (AWK) Stock Looks Fully Priced On Its 14% Three Year Gain — Artículo de opinión que sugiere que la acción está totalmente valorada tras una ganancia moderada; refleja una visión de valoración, no un hecho material.
- American Water Works Company (AWK), What Is Behind The Latest Attention? — Titular genérico sin información nueva o cuantificable.
- 3 U.S. Utility Stocks Built For Higher Rates And Inflation Pass Through — Destaca la capacidad de AWK para trasladar la inflación a las tarifas, un atributo clave de su modelo regulado que mitiga el impacto de tipos altos.
- What Does American Water Works Company (AWK) Gain From Its Digital Push And Training Hub? — La inversión en digitalización y formación puede mejorar la eficiencia operativa y el servicio, apoyando el crecimiento a largo plazo.
- Can Rising Water Demand Boost California Water's Long-Term Growth? — Artículo sobre California Water Service Group, no sobre American Water Works; irrelevante para AWK.
Verdict: Hold; the strength of the regulated model and the dividend (yield 2.73%) offer stability, but the valuation is not attractive and leverage limits upside potential.
Main risk: The main risk is the high leverage (net debt/EBITDA of 5.44) in a rising interest rate environment, which makes refinancing more expensive and pressures the valuation of a long-duration cash flow company.
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