American Water Works CoAWK +3.85%78 Return-on-Tangible-Equity is 8.02% as of Mar. 2026, which is 37% below its 10-year median of 12.66. GuruFocus rates AWK with a GF Score™ of 78/100 and a GF Value™ of $155.70 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 498 Utilities - Regulated companies, American Water Works Co ranks better than 53.01% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. American Water Works Co's annualized net income for the quarter that ended in Mar. 2026 was $784 Mil. American Water Works Co's average shareholder tangible equity for the quarter that ended in Mar. 2026 was $9,781 Mil. Therefore, American Water Works Co's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 8.02%.
The historical rank and industry rank for American Water Works Co's Return-on-Tangible-Equity or its related term are showing as below:
AWK'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 10.83 Med: 12.66 Max: 22.85
Current: 11.42
During the past 13 years, American Water Works Co's highest Return-on-Tangible-Equity was 22.85%. The lowest was 10.83%. And the median was 12.66%.
AWK's Return-on-Tangible-Equity is ranked better than 53.01% of 498
companies
in the Utilities - Regulated industry
Industry Median: 10.91
vs AWK: 11.42
American Water Works Co (NYSE:AWK) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
American Water Works Co Return-on-Tangible-Equity Related Terms
American Water Works Co Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for American Water Works Co's Return-on-Tangible-Equity 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.
American Water Works Co Return-on-Tangible-Equity Chart
AWK vs WTRG, AWR, CWT: Return-on-Tangible-Equity Comparison
For the Utilities - Regulated Water subindustry, American Water Works Co's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Water Works Co's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where American Water Works Co's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 8.02% mean?
American Water Works Co (AWK) has a Return-on-Tangible-Equity of 8.02% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on American Water Works Co and its competitors. This is 37% below median its historical median of 12.66. Over the past decade, American Water Works Co's Return-on-Tangible-Equity has ranged from 10.83 to 22.85. According to the industry distribution chart, American Water Works Co ranks #234 out of 498 companies in the Utilities - Regulated industry, placing it in the top 47%.
Is American Water Works Co's Return-on-Tangible-Equity too high?
American Water Works Co's current Return-on-Tangible-Equity of 8.02% is 37% below median its 10-year median of 12.66. Over the past 10 years, this metric has ranged from a low of 10.83 to a high of 22.85. The Utilities - Regulated industry median Return-on-Tangible-Equity is 10.91. American Water Works Co's value of 8.02% is 26.5% below this industry median. Based on the distribution chart, American Water Works Co ranks #234 out of 498 companies in the Utilities - Regulated industry, which is above the industry midpoint. 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 Return-on-Tangible-Equity compare to WTRG and AWR?
According to the Utilities - Regulated industry distribution chart, American Water Works Co ranks #234 out of 498 companies for Return-on-Tangible-Equity. This puts American Water Works Co in the upper half of its industry. The industry median Return-on-Tangible-Equity is 10.91. American Water Works Co's value of 8.02% is 26.5% below this benchmark. Historically, American Water Works Co's own Return-on-Tangible-Equity has ranged from 10.83 to 22.85 over the past decade. While the company's 10-year median is 12.66 vs. the industry median of 10.91, American Water Works Co has consistently been below 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 Return-on-Tangible-Equity for an Utilities - Regulated company?
The median Return-on-Tangible-Equity among Utilities - Regulated companies is 10.91, based on 498 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. American Water Works Co's current Return-on-Tangible-Equity of 8.02% is 26.5% below 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on American Water Works Co and its competitors. For the Utilities - Regulated industry, the median Return-on-Tangible-Equity is 10.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Water Works Co's current Return-on-Tangible-Equity is 8.02%, which is 37% below median its own 10-year median of 12.66. 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 $155.70, compared to a current price of $136.86 — trading 12.1% below its estimated fair value. The current Return-on-Tangible-Equity is 8.02%, which is 37% below median its 10-year median of 12.66 and 26.5% below the Utilities - Regulated industry median of 10.91. American Water Works Co's overall GF Score™ is 78/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For American Water Works Co (AWK), the current Return-on-Tangible-Equity is 8.02% 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 (AWK) Overvalued in 2026?
Based on GuruFocus' analysis, American Water Works Co stock appears to be undervalued.
The current stock price of $136.86 is trading 12.1% below its estimated GF Value™ of $155.70.
GuruFocus considers American Water Works Co to be Modestly Undervalued.
Key valuation signals for AWK:
Return-on-Tangible-Equity: 8.02% (37% below median its 10-year median of 12.66)
GF Value™: $155.70 vs. price of $136.86 (12.1% below fair value)
Industry Position: 26.5% below the Utilities - Regulated median (#234 of 498)
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
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