Fact based stock research
American Water Works (NYSE:AWK)

US0304201033

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

American Water Works stock research in summary

amwater.com

ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), American Water Works (Water Utilities, USA) shares have lower financial characteristics compared with similar stocks. Shares of American Water Works are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives), and are riskily financed (Safety Rank of 42, which means above-average debt burdens) but show above-average growth (Growth Rank of 71). ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on American Water Works's financial characteristics. As the company American Water Works shows low value with an Obermatt Value Rank of 5 (95% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 71% of comparable companies (Obermatt Growth Rank is 71). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 42 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for American Water Works, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	5
Growth Rank	71
Safety Rank	42
Combined Rank	16

Country	USA
Industry	Water Utilities
Index	Low Emissions, Diversity USA, SDG 11, SDG 13, SDG 4, SDG 6, SDG 9, Water Tech, S&P 500
Size class	Medium

31-Jul-2025. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: American Water Works

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	9	12	8	5
GROWTH
GROWTH	37	79	77	71
SAFETY
SAFETY	9	55	59	42
SENTIMENT
SENTIMENT	28	63	53	^new
360° VIEW
360° VIEW	1	55	50	^new

Most recent update of the stock research: 31-Jul-2025. Financial reporting date used for calculating ranks: 31-Mar-2025. Stock research history is based on the Obermatt Method. The higher the rank, the better American Water Works is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	9	12	8	5
GROWTH
GROWTH	37	79	77	71
SAFETY
SAFETY	9	55	59	42
COMBINED
COMBINED	1	47	41	16

Last update of combined financial performance: 31-Jul-2025. Stock analysis on combined financial performance: The higher the rank of American Water Works the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), American Water Works shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for American Water Works. Price-to-Sales is 4 which means that the stock price compared with what market professionals expect for future profits is higher than 96% of comparable companies, indicating a low value concerning American Water Works's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 20, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of American Water Works. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 83% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a sell recommendation based on American Water Works's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for American Water Works? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as American Water Works? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. American Water Works may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2022	2023	2024	2025
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	6	7	3	4
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	13	17	14	13
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	12	22	23	20
DIVIDEND YIELD
DIVIDEND YIELD	11	18	13	17
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	9	12	8	5

Last update of Value Rank: 31-Jul-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of American Water Works; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), American Water Works shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for American Water Works. Sales Growth has a value of 88 which means that currently professionals expect the company to grow more than 88% of its competitors. Profit Growth with a value of 54 and Capital Growth with a rank of 51 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 29, which means that stock returns have recently been below 71% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. American Water Works has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for American Water Works, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2022	2023	2024	2025
REVENUE GROWTH
REVENUE GROWTH	7	69	71	88
PROFIT GROWTH
PROFIT GROWTH	62	85	70	54
CAPITAL GROWTH
CAPITAL GROWTH	77	67	64	51
STOCK RETURNS
STOCK RETURNS	25	31	25	29
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	37	79	77	71

Last update of Growth Rank: 31-Jul-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of American Water Works.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company American Water Works has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of American Water Works is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for American Water Works. Liquidity is at 74, meaning the company generates more profit to service its debt than 74% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 42, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 58% of its competitors. Leverage is also high at a rank of 42, which means that the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), American Water Works has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2022	2023	2024	2025
LEVERAGE
LEVERAGE	16	32	58	42
REFINANCING
REFINANCING	7	77	48	42
LIQUIDITY
LIQUIDITY	62	46	78	74
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	9	55	59	42

Last update of Safety Rank: 31-Jul-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of American Water Works and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2022	2023	2024	2025
ANALYST OPINIONS
ANALYST OPINIONS	n/a	46	20	^new
OPINIONS CHANGE
OPINIONS CHANGE	57	72	54	^new
PRO HOLDINGS
PRO HOLDINGS	43	61	73	^new
MARKET PULSE
MARKET PULSE	56	62	42	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	28	63	53	^new

Last update of Sentiment Rank: 31-Jul-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for American Water Works.
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