CluenexAmerican Water Works AWK
American Water Works scores average on business quality (5.4 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What American Water Works does
American Water Works operates regulated water and wastewater utilities across multiple US states, billing residential and commercial customers for essential municipal services.
- What it does best
AWK dominates through immense scale as the largest US publicly traded water utility, delivering a 36.9% operating margin that outpaces peer WTRG at 35.1%. This geographic spread shields it from localized regulatory shocks.
- The main risk
Heavy reliance on continuous capital expenditure drives negative free cash flow of $1.0B, forcing regular external debt financing. Rising interest rates directly pressure borrowing costs across its $15.8B total debt load.
Quality, check by check
Scored against its own industry, from company filings.
Operating margin hits 36.9% while ROE stands at 10.1%, showing reliable operational efficiency regulated by state commissions. Higher scale yields stable returns rather than expanding margins due to strict price caps.
State-granted geographic monopolies lock in residential and commercial customers with zero alternative choices. Operating in the top decile of its sector for operating margin at 94th percentile, its local footprint cannot be duplicated by rivals.
Revenue grew 9.7% to $5.3B, driven by regulated rate increases and system expansions. This pace slightly exceeds its historical trend, though growth is capped by state utility commission price caps.
Total debt sits at $15.8B with an interest coverage ratio of 3.0x, leaving narrow margin for rate shocks. Free cash flow remains deeply negative at -$1.0B due to heavy capital spending, making the balance sheet softer over time.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
No open market buys or unplanned sales by executives or directors.
Our sealed record on AWK
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
American Water Works scores average on the Cluenex quality check (5.4 of 10), measured against its own industry. Profitability is fair, moat weak, growth steady and financial health fair.
In the last 90 days of SEC Form 4 filings: No open market buys or unplanned sales by executives or directors.
Oct 28, 2026.
See AWK today
- Today's verdict on AWK, and why
- Fair value with cautious, base and optimistic cases
- The exact price that would change the verdict
- Which stocks each signal names, the night it fires
Cite this page: Cluenex, “American Water Works (AWK)”, https://cluenex.com/stocks/awk/, data as of Oct 10, 2026.