| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 83.00 | -23 |
| Intrinsic value (DCF) | 53.73 | -50 |
| Graham-Dodd Method | 25.20 | -77 |
| Graham Formula | 85.30 | -21 |
American Water Works Company, Inc. (AWC.DE) is the largest publicly traded water and wastewater utility company in the United States, providing essential water services to approximately 14 million people across 24 states. With a history dating back to 1886, the company operates a vast infrastructure network, including over 80 surface water treatment plants, 480 groundwater treatment plants, and 52,500 miles of transmission and distribution mains. Serving residential, commercial, industrial, and public sector customers, American Water Works ensures reliable water and wastewater services through regulated and market-based operations. The company also manages military installations and municipal contracts, reinforcing its critical role in water infrastructure management. Listed on the Deutsche Börse (XETRA) and headquartered in Camden, New Jersey, American Water Works is a key player in the Utilities sector, benefiting from stable demand and regulatory frameworks that support long-term growth and profitability.
American Water Works Company, Inc. presents a compelling investment opportunity due to its dominant market position, stable cash flows, and essential service offerings. The company's regulated business model provides predictable revenue streams, supported by a 0.728 beta, indicating lower volatility compared to the broader market. With a market cap of €24.46 billion and strong financials—including €4.68 billion in revenue and €1.05 billion in net income—the company demonstrates robust profitability. Its diluted EPS of €5.39 and a dividend yield of ~2.96% appeal to income-focused investors. However, high total debt (€14.11 billion) and capital-intensive operations pose risks, particularly in an environment of rising interest rates. The company's growth is tied to infrastructure investments and regulatory approvals, which could limit short-term upside.
American Water Works Company, Inc. holds a competitive advantage as the largest and most geographically diversified water utility in the U.S., benefiting from economies of scale and regulatory moats. Its extensive infrastructure network and long-term contracts with municipalities and military bases create high barriers to entry for competitors. The company's focus on operational efficiency and technological advancements in water treatment further strengthens its position. However, the water utility sector is highly fragmented, with many regional players and municipal providers competing for market share. American Water's growth relies on acquisitions and regulatory rate increases, which can be slow and politically sensitive. Unlike some peers, it lacks significant international exposure, limiting diversification. Its competitive edge lies in its ability to leverage its scale for cost efficiencies and reinvestment in infrastructure, but it faces challenges from local utilities with strong community ties and lower-cost structures.