American Water Works CoAWK +1.30%78 3-Year ROIIC % is 5.23 as of Dec. 2025, which is 23% above its 10-year median of 4.24. GuruFocus rates AWK with a GF Score™ of 78/100 and a GF Value™ of $155.78 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 478 Utilities - Regulated companies, American Water Works Co ranks better than 55.23% on this metric.
3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
American Water Works Co's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 5.23%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for American Water Works Co's 3-Year ROIIC % or its related term are showing as below:
AWK's 3-Year ROIIC % is ranked better than 55.23% of 478
companies
in the Utilities - Regulated industry
Industry Median: 3.99
vs AWK: 5.23
American Water Works Co (NYSE:AWK) 3-Year ROIIC % Explanation
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
American Water Works Co 3-Year ROIIC % Related Terms
American Water Works Co 3-Year ROIIC % Historical Data
* 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 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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 3-Year ROIIC % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, American Water Works Co's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where American Water Works Co's 3-Year ROIIC % falls into.
American Water Works Co 3-Year ROIIC % Calculation
American Water Works Co's 3-Year ROIIC % for the quarter that ended in Dec. 2025 is calculated as:
3-Year ROIIC %
=
3-Year Incremental Net Operating Profit After Taxes (NOPAT)**
/
3-Year Incremental Invested Capital**
=
( 1468.0627 (Dec. 2025) - 1035.5855 (Dec. 2022) )
/
( 36516 (Dec. 2025) - 28248 (Dec. 2022) )
=
432.4772
/
8268
=
5.23%***
* 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
American Water Works Co (AWK) has a 3-Year ROIIC % of 5.23 as of Dec. 2025. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on American Water Works Co and its competitors. This is 23% above median its historical median of 4.24. According to the industry distribution chart, American Water Works Co ranks #214 out of 478 companies in the Utilities - Regulated industry, placing it in the top 44.8%.
Is American Water Works Co's 3-Year ROIIC % too high?
American Water Works Co's current 3-Year ROIIC % of 5.23 is 23% above median its 10-year median of 4.24. The Utilities - Regulated industry median 3-Year ROIIC % is 3.99. American Water Works Co's value of 5.23 is 31.1% above this industry median. Based on the distribution chart, American Water Works Co ranks #214 out of 478 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 3-Year ROIIC % compare to WTRG and AWR?
According to the Utilities - Regulated industry distribution chart, American Water Works Co ranks #214 out of 478 companies for 3-Year ROIIC %. This puts American Water Works Co in the upper half of its industry. The industry median 3-Year ROIIC % is 3.99. American Water Works Co's value of 5.23 is 31.1% above this benchmark. While the company's 10-year median is 4.24 vs. the industry median of 3.99, 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 3-Year ROIIC % for an Utilities - Regulated company?
The median 3-Year ROIIC % among Utilities - Regulated companies is 3.99, based on 478 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year ROIIC % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. American Water Works Co's current 3-Year ROIIC % of 5.23 is 31.1% 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 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on American Water Works Co and its competitors. For the Utilities - Regulated industry, the median 3-Year ROIIC % is 3.99 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Water Works Co's current 3-Year ROIIC % is 5.23, which is 23% above median its own 10-year median of 4.24. 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 $155.78, compared to a current price of $134.82 — trading 13.5% below its estimated fair value. The current 3-Year ROIIC % is 5.23, which is 23% above median its 10-year median of 4.24 and 31.1% above the Utilities - Regulated industry median of 3.99. 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 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For American Water Works Co (AWK), the current 3-Year ROIIC % is 5.23 as of Dec. 2025. 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 $134.82 is trading 13.5% below its estimated GF Value™ of $155.78.
GuruFocus considers American Water Works Co to be Modestly Undervalued.
Key valuation signals for AWK:
3-Year ROIIC %: 5.23 (23% above median its 10-year median of 4.24)
GF Value™: $155.78 vs. price of $134.82 (13.5% below fair value)
Industry Position: 31.1% above the Utilities - Regulated median (#214 of 478)
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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