Is American Water Works Stock Underperforming the Dow?

With a market cap of $26.2 billion, American Water Works Company, Inc. (AWK) is the largest publicly traded water and wastewater utility company in the United States, headquartered in Camden, New Jersey. The company provides drinking water, wastewater, and other related services to residential, commercial, industrial, and government customers across the U.S.

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and American Water Works fits this criterion perfectly. American Water Works plays a critical role in supplying safe and reliable water services while investing in long-term infrastructure and environmental sustainability initiatives across the U.S. water utility sector.

Shares of the water utility company have declined 11.1% from its 52-week high of $155.50. Over the past three months, its shares have dipped 5.1%, trailing the Dow Jones Industrial Average’s ($DOWI) 3.7% decline during the same time frame.

Over the past six months, AWK shares have plunged marginally, lagging behind DOWI’s 1.8% return. In addition, shares of American Water Works have dropped nearly 1.9% over the past 52 weeks, compared to DOWI’s 12.9% rally over the same time frame.

AWK has seen immense volatility over the past year, but has swiftly climbed over its 50-day moving average since mid-February and over its 200-day moving average recently. 

American Water Works reported its FY2025 Q4 results on Feb. 18, and its shares dipped 1.8%. The company posted adjusted earnings of $1.24 per share, which missed analysts’ expectations of $1.28 but increased 7.8% year over year from $1.15 in the prior-year quarter. Its revenue rose 5.8% year over year to $1.27 billion. However, operating expenses rose 8.1% to $866 million due to an increase in employee-related costs, increased production costs, which include higher purchased power and purchased water costs and usage, as well as general taxes associated with increased capital investment. Looking ahead, the company affirms its 2026 adjusted EPS guidance range of $6.02 to $6.12. 

AWK stock has also lagged behind its rival, Essential Utilities, Inc. (WTRG). WTRG stock has gained 7.2% over the past six months and 6.5% over the past 52 weeks.

Due to AWK’s weak performance, analysts are cautious about its prospects. The stock has a consensus rating of “Hold” from the 12 analysts covering the stock, and the mean price target of $140.80 indicates a marginal premium to current price levels.