American Water Works CoWBO:AWK +1.17%72 Operating Margin % is 32.39% as of Mar. 2026, which is 4% below its 10-year median of 33.60. GuruFocus rates WBO:AWK with a GF Score™ of 72/100 and a GF Value™ of €135.18 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 499 Utilities - Regulated companies, American Water Works Co ranks better than 91.58% on this metric.
American Water Works Co Inc operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for American Water Works Co's Operating Margin % or its related term are showing as below:
WBO:AWK'
s Operating Margin % Range Over the Past 10 Years
Min: 30.43 Med: 33.6 Max: 36.85
Current: 36.48
WBO:AWK's Operating Margin % is ranked better than 91.58% of 499
companies
in the Utilities - Regulated industry
Industry Median: 14.97
vs WBO:AWK: 36.48
American Water Works Co (WBO:AWK) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
American Water Works Co Operating Margin % Related Terms
American Water Works Co Operating Margin % Historical Data
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The historical data trend for American Water Works Co's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
WBO:AWK vs WTRG, AWR, CWT: Operating Margin % Comparison
For the Utilities - Regulated Water subindustry, American Water Works Co's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
American Water Works Co Operating Margin % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Water Works Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where American Water Works Co's Operating Margin % falls into.
American Water Works Co Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
American Water Works Co's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
American Water Works Co (WBO:AWK) has a Operating Margin % of 32.39% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on American Water Works Co and its competitors. This is near median its historical median of 33.60. Over the past decade, American Water Works Co's Operating Margin % has ranged from 30.43 to 36.85. According to the industry distribution chart, American Water Works Co ranks #42 out of 499 companies in the Utilities - Regulated industry, placing it in the top 8.4%.
Is American Water Works Co's Operating Margin % too high?
American Water Works Co's current Operating Margin % of 32.39% is near median its 10-year median of 33.60. Over the past 10 years, this metric has ranged from a low of 30.43 to a high of 36.85. The Utilities - Regulated industry median Operating Margin % is 14.97. American Water Works Co's value of 32.39% is 116.4% above this industry median. Based on the distribution chart, American Water Works Co ranks #42 out of 499 companies in the Utilities - Regulated industry, which is in the top quartile — a strong position relative to peers. Overall, American Water Works Co has a GF Score™ of 72/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does American Water Works Co's Operating Margin % compare to WTRG and AWR?
According to the Utilities - Regulated industry distribution chart, American Water Works Co ranks #42 out of 499 companies for Operating Margin %. This places American Water Works Co in the top 8% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 14.97. American Water Works Co's value of 32.39% is 116.4% above this benchmark. Historically, American Water Works Co's own Operating Margin % has ranged from 30.43 to 36.85 over the past decade. While the company's 10-year median is 33.60 vs. the industry median of 14.97, American Water Works Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for an Utilities - Regulated company?
The median Operating Margin % among Utilities - Regulated companies is 14.97, based on 499 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. American Water Works Co's current Operating Margin % of 32.39% is 116.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on American Water Works Co and its competitors. For the Utilities - Regulated industry, the median Operating Margin % is 14.97 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Water Works Co's current Operating Margin % is 32.39%, which is near median its own 10-year median of 33.60. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is American Water Works Co stock overvalued right now?
Based on GuruFocus' analysis, American Water Works Co (WBO:AWK) is currently considered Modestly Undervalued. The stock's GF Value™ is €135.18, compared to a current price of €112.70 — trading 16.6% below its estimated fair value. The current Operating Margin % is 32.39%, which is near median its 10-year median of 33.60 and 116.4% above the Utilities - Regulated industry median of 14.97. American Water Works Co's overall GF Score™ is 72/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For American Water Works Co (WBO:AWK), the current Operating Margin % is 32.39% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is American Water Works Co (WBO:AWK) Overvalued in 2026?
Based on GuruFocus' analysis, American Water Works Co stock appears to be undervalued.
The current stock price of €112.70 is trading 16.6% below its estimated GF Value™ of €135.18.
GuruFocus considers American Water Works Co to be Modestly Undervalued.
Key valuation signals for WBO:AWK:
Operating Margin %: 32.39% (near median its 10-year median of 33.60)
GF Value™: €135.18 vs. price of €112.70 (16.6% below fair value)
Industry Position: 116.4% above the Utilities - Regulated median (#42 of 499)
No single metric tells the full story. See the WBO:AWK stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
American Water Works is the largest investor-owned US water and wastewater utility, serving nearly 4 million customers in 14 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets. The company's nonregulated business is water services for military bases, which operates under long-term contracts with regulated-like returns. The proposed Essential Utilities acquisition would add regulated water and wastewater utilities in Ohio, North Carolina, and Texas while increasing its presence in Illinois, Indiana, Pennsylvania, New Jersey, and Virginia.
72GF Score
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