Thinking About American Water Works Company (AWK)? We Studied It, so You Don't Have To.

Over the last year, American Water Works Company logged a negative performance of -6.9%, with a high of $173.87 and a low of $122.77. During this time, the stock outpaced the S&P 500 index by 9.7%. As of January 2023, the company's 50-day average price was $149.57. American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. Based in Camden, NJ, the large-cap Utilities company has 6,400 full time employees. American Water Works Company has provided a 1.0% dividend yield over the last 12 months.

The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $3,610 $3,777 $3,930
Revenue Growth n/a 4.63% 4.05%
Gross Margins 57.2% 57.1% 54.8%
Gross Margins Growth n/a -0.17% -4.03%
Operating Margins 33.4% 33.0% 30.4%
Operating Margins Growth n/a -1.2% -7.88%
Earnings Per Share $3.43 $3.91 $6.95
EPS Growth n/a 13.99% 77.75%
Free Cash Flow (MM) -$375 -$502 -$432
FCF Growth n/a -33.87% 13.94%
Capital Expenditures (MM) -$1,758 -$1,928 -$1,873
Net Debt / EBITDA 5.15 5.61 5.62

A Lower P/E Ratio Than Its Sector Average but Trades Above Its Graham Number:

American Water Works Company has a trailing twelve month P/E ratio of 22.0, compared to an average of 26.37 for the Utilities sector. Based on its EPS guidance of 4.78, the company has a forward P/E ratio of 33.3. The company's PEG ratio is 4.19, which suggests that it is overpriced relative to its expected rate of earnings growth.

American Water Works Company is likely overvalued compared to its net tangible assets, since its P/B ratio of 3.7 is higher than the sector average of 1.47. The company's shares are currently 135.6% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and assets.

There's an Analyst Consensus of Some Upside Potential for American Water Works Company:

There are 10 analysts covering American Water Works Company, with target prices ranging from $134 to $186 per share, for an average of $160.3. As of January 2023, the company is trading -0.63% away from its average target price, implying there is an analyst consensus of some upside potential. The average rating for American Water Works Company is buy.

With a 2.2% short interest, American Water Works Company has an average amount of shares sold short. Institutions own 88.9% of the company's shares, and it has a small amount of insider investors because 0.2% are owned by corporate insiders. Overall, the company's top shareholder is the Vanguard Group, Inc., whose 12% stake in the company is worth around $3,582,286,198.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.