Using the PEG framework with analyst consensus forward EPS growth of 10.1% plus 2.4% dividend yield, American Water Works Company, Inc. has a fair value of $61.40 based on NTM EPS (FY2026) of $6.10. The current PEG ratio is 2.24.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 7.7% |
| Dividend Yield | +2.4% |
| Adjusted Growth (clamped 8–25%) | 10.1% |
| Fair P/E | 10.1x |
| NTM EPS (FY2026) | $6.10 |
| Fair Value | $61.40 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $5.70 | — | — |
| FY2026E | $6.10 | +7.1% | 6 |
| FY2027E | $6.60 | +8.1% | 5 |
| FY2028E | $7.15 | +8.3% | 6 |
| FY2029E | $7.82 | +9.4% | 5 |
| FY2030E | $8.26 | +5.7% | 3 |
5Y Forward EPS CAGR: 7.7%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $1.3B | $6.94 | — |
| FY2022 | $820.0M | $4.51 | -35.0% |
| FY2023 | $944.0M | $4.89 | +8.4% |
| FY2024 | $1.1B | $5.39 | +10.2% |
| FY2025 | $1.1B | $5.70 | +5.8% |
4Y Historical EPS CAGR: -4.8%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.