Focused on building reliable datasets, financial models, and research tools for value-minded investors. Committed to turning complex data into practical guidance for value-investing and long-term wealth.
Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
American Water Works Co has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
American Water Works Co Inc displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
American Water Works Co's Interest Coverage for the quarter that ended in Jun. 2026 was 3.25.
American Water Works Co's debt to revenue ratio for the quarter that ended in Jun. 2026 was 2.96.
As of today, American Water Works Co's Altman Z-Score is 1.06.
American Water Works Co (NYSE:AWK) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
American Water Works Co has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
American Water Works Co Financial Strength Related Terms
AWK vs WTRG, AWR, CWT: Financial Strength Comparison
For the Utilities - Regulated Water subindustry, American Water Works Co's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Water Works Co's Financial Strength distribution charts can be found below:
* The bar in red indicates where American Water Works Co's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
American Water Works Co has a Z-score of 1.06, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 1.06 is in distress zone. This implies bankruptcy possibility in the next two years.
* 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 (AWK) has a Financial Strength of 3 as of Jun. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on American Water Works Co and its competitors. This is 25% below median its historical median of 4.00. Over the past decade, American Water Works Co's Financial Strength has ranged from 3.00 to 6.00.
Is American Water Works Co's Financial Strength too high?
American Water Works Co's current Financial Strength of 3 is 25% below median its 10-year median of 4.00. Over the past 10 years, this metric has ranged from a low of 3.00 to a high of 6.00. Overall, American Water Works Co has a GF Score™ of 78/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does American Water Works Co's Financial Strength compare to WTRG and AWR?
American Water Works Co's Financial Strength of 3 can be compared against companies in the Utilities - Regulated industry. Historically, American Water Works Co's own Financial Strength has ranged from 3.00 to 6.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for an Utilities - Regulated company?
A good Financial Strength depends on the Utilities - Regulated industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on American Water Works Co and its competitors. American Water Works Co's current Financial Strength is 3, which is 25% below median its own 10-year median of 4.00. 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 (AWK) is currently considered Modestly Undervalued. The stock's GF Value™ is $154.17, compared to a current price of $138.30 — trading 10.3% below its estimated fair value. The current Financial Strength is 3, which is 25% below median its 10-year median of 4.00. American Water Works Co's overall GF Score™ is 78/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For American Water Works Co (AWK), the current Financial Strength is 3 as of Jun. 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 (AWK) Overvalued in 2026?
Based on GuruFocus' analysis, American Water Works Co stock appears to be undervalued.
The current stock price of $138.30 is trading 10.3% below its estimated GF Value™ of $154.17.
GuruFocus considers American Water Works Co to be Modestly Undervalued.
Key valuation signals for AWK:
Financial Strength: 3 (25% below median its 10-year median of 4.00)
GF Value™: $154.17 vs. price of $138.30 (10.3% below fair value)
No single metric tells the full story. See the 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.
78GF Score
Get the complete analysis for AWK
Financial Strength is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
AWK has been successfully added to your 
