American Water Return On Equity vs. Revenue

AWC Stock  EUR 117.80  1.60  1.34%   
Considering American Water's profitability and operating efficiency indicators, American Water Works may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess American Water's ability to earn profits and add value for shareholders.
For American Water profitability analysis, we use financial ratios and fundamental drivers that measure the ability of American Water to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well American Water Works utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between American Water's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of American Water Works over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between American Water's value and its price as these two are different measures arrived at by different means. Investors typically determine if American Water is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Water's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

American Water Works Revenue vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining American Water's current stock value. Our valuation model uses many indicators to compare American Water value to that of its competitors to determine the firm's financial worth.
American Water Works is rated below average in return on equity category among its peers. It is rated below average in revenue category among its peers totaling about  34,661,791,590  of Revenue per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the American Water's earnings, one of the primary drivers of an investment's value.

American Revenue vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

American Water

Return On Equity

 = 

Net Income

Total Equity

 = 
0.11
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.

American Water

Revenue

 = 

Money Received

-

Discounts and Returns

 = 
3.79 B
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

American Revenue vs Competition

American Water Works is rated below average in revenue category among its peers. Market size based on revenue of Utilities - Regulated Water industry is presently estimated at about 92.07 Billion. American Water holds roughly 3.79 Billion in revenue claiming about 4% of Utilities - Regulated Water industry.

American Water Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in American Water, profitability is also one of the essential criteria for including it into their portfolios because, without profit, American Water will eventually generate negative long term returns. The profitability progress is the general direction of American Water's change in net profit over the period of time. It can combine multiple indicators of American Water, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company was founded in 1886 and is headquartered in Camden, New Jersey. American Water operates under Utilities - Regulated Water classification in Germany and is traded on Frankfurt Stock Exchange. It employs 7100 people.

American Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on American Water. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of American Water position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the American Water's important profitability drivers and their relationship over time.

Use American Water in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if American Water position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Water will appreciate offsetting losses from the drop in the long position's value.

American Water Pair Trading

American Water Works Pair Trading Analysis

The ability to find closely correlated positions to American Water could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace American Water when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back American Water - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling American Water Works to buy it.
The correlation of American Water is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as American Water moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if American Water Works moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for American Water can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your American Water position

In addition to having American Water in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Additional Information and Resources on Investing in American Stock

When determining whether American Water Works is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if American Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about American Water Works Stock. Highlighted below are key reports to facilitate an investment decision about American Water Works Stock:
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You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
To fully project American Water's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of American Water Works at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include American Water's income statement, its balance sheet, and the statement of cash flows.
Potential American Water investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although American Water investors may work on each financial statement separately, they are all related. The changes in American Water's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on American Water's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.