MeritValue

American Water Works Company, Inc.

AWKdata completeness 100%18 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'gainsOnRealEstateSales'; no data for concept 'realEstateImpairment'

The thesis, from the filings

American Water Works Company, Inc. earns about 11% on invested capital, but has diluted owners by 7% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $55.62 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.91B1$3.76B2$4.22B3$4.65B3$5.12B3
Net income$1.26B4$820M5$944M6$1.05B6$1.11B6
Operating cash flow$1.44B7$1.11B8$1.87B9$2.05B9$2.06B9
Capital expenditure$1.76B10$2.3B11$2.58B12$2.86B12$3.13B12
Free cash flow (derived)−$323M7−$1.19B8−$701M9−$811M9−$1.07B9
Total debt$584M13$1.18B14$179M15$879M16$1.59B16
Cash & equivalents$116M17$85M18$330M19$96M20$98M20
Diluted shares182.0M182.0M193.0M195.0M195.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$555.74
your share of equity
Profit it earned you last year
$56.97
Free cash flow it threw off
−$54.72
Debt you’d be carrying
$81.44

10 shares is a claim on $555.74 of net worth that earned you $56.97 and generated −$54.72 of cash last year, against $81.44 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
11% avg · 5y
FY21 16%FY22 9%FY23 10%FY24 9%FY25 9%

It earned an average 11% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+7% shares · 5y

Share count is up 7% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 172% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$55.62
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.05B
  • growthAssumed0.0%
Graham Number
$84.35
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001410636-24-000050 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001410636-25-000022 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001410636-26-000034 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001410636-24-000050 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001410636-25-000022 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001410636-26-000034 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001410636-24-000050 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001410636-25-000022 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001410636-26-000034 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001410636-24-000050 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001410636-25-000022 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001410636-26-000034 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001410636-23-000020 (ShortTermBorrowings)
  14. 10-K · period ending 2022-12-31 · accession 0001410636-24-000050 (ShortTermBorrowings)
  15. 10-K · period ending 2023-12-31 · accession 0001410636-25-000022 (ShortTermBorrowings)
  16. 10-K · period ending 2024-12-31 · accession 0001410636-26-000034 (ShortTermBorrowings)
  17. 10-K · period ending 2021-12-31 · accession 0001410636-23-000020 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001410636-24-000050 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001410636-25-000022 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001410636-26-000034 (CashAndCashEquivalentsAtCarryingValue)