American Water Works CoSTU:AWC -0.18%83 ROE % is 7.21% as of Mar. 2026, which is 31% below its 10-year median of 10.47. GuruFocus rates STU:AWC with a GF Score™ of 83/100 and a GF Value™ of €136.32 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 503 Utilities - Regulated companies, American Water Works Co ranks better than 60.64% on this metric.
The historical rank and industry rank for American Water Works Co's ROE % or its related term are showing as below:
STU:AWC'
s ROE % Range Over the Past 10 Years
Min: 8.04 Med: 10.47 Max: 18.37
Current: 10.2
During the past 13 years, American Water Works Co's highest ROE % was 18.37%. The lowest was 8.04%. And the median was 10.47%.
STU:AWC's ROE % is ranked better than 60.64% of 503
companies
in the Utilities - Regulated industry
Industry Median: 8.62
vs STU:AWC: 10.20
American Water Works Co (STU:AWC) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % 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 ROE %s can be extremely high.
* 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.
For the Utilities - Regulated Water subindustry, American Water Works Co's ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Water Works Co's ROE % distribution charts can be found below:
* The bar in red indicates where American Water Works Co's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder 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.
ROE % is displayed in the 30-year financial page.
American Water Works Co (STU:AWC) has a ROE % of 7.21% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on American Water Works Co and its competitors. This is 31% below median its historical median of 10.47. Over the past decade, American Water Works Co's ROE % has ranged from 8.04 to 18.37. According to the industry distribution chart, American Water Works Co ranks #198 out of 503 companies in the Utilities - Regulated industry, placing it in the top 39.4%.
Is American Water Works Co's ROE % too high?
American Water Works Co's current ROE % of 7.21% is 31% below median its 10-year median of 10.47. Over the past 10 years, this metric has ranged from a low of 8.04 to a high of 18.37. The Utilities - Regulated industry median ROE % is 8.62. American Water Works Co's value of 7.21% is 16.4% below this industry median. Based on the distribution chart, American Water Works Co ranks #198 out of 503 companies in the Utilities - Regulated industry, which is above the industry midpoint. Overall, American Water Works Co has a GF Score™ of 83/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does American Water Works Co's ROE % compare to WTRG and AWR?
According to the Utilities - Regulated industry distribution chart, American Water Works Co ranks #198 out of 503 companies for ROE %. This puts American Water Works Co in the upper half of its industry. The industry median ROE % is 8.62. American Water Works Co's value of 7.21% is 16.4% below this benchmark. Historically, American Water Works Co's own ROE % has ranged from 8.04 to 18.37 over the past decade. While the company's 10-year median is 10.47 vs. the industry median of 8.62, 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 ROE % for an Utilities - Regulated company?
The median ROE % among Utilities - Regulated companies is 8.62, based on 503 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. American Water Works Co's current ROE % of 7.21% is 16.4% 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on American Water Works Co and its competitors. For the Utilities - Regulated industry, the median ROE % is 8.62 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Water Works Co's current ROE % is 7.21%, which is 31% below median its own 10-year median of 10.47. 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 (STU:AWC) is currently considered Modestly Undervalued. The stock's GF Value™ is €136.32, compared to a current price of €113.95 — trading 16.4% below its estimated fair value. The current ROE % is 7.21%, which is 31% below median its 10-year median of 10.47 and 16.4% below the Utilities - Regulated industry median of 8.62. American Water Works Co's overall GF Score™ is 83/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For American Water Works Co (STU:AWC), the current ROE % is 7.21% 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 (STU:AWC) Overvalued in 2026?
Based on GuruFocus' analysis, American Water Works Co stock appears to be undervalued.
The current stock price of €113.95 is trading 16.4% below its estimated GF Value™ of €136.32.
GuruFocus considers American Water Works Co to be Modestly Undervalued.
Key valuation signals for STU:AWC:
ROE %: 7.21% (31% below median its 10-year median of 10.47)
GF Value™: €136.32 vs. price of €113.95 (16.4% below fair value)
Industry Position: 16.4% below the Utilities - Regulated median (#198 of 503)
No single metric tells the full story. See the STU:AWC 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.
83GF Score
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