American Water Works - Comparative Multiple Analysis

American Water Works (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of American Water Works

WikiWealth compares American Water Works's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with American Water Works's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for American Water Works.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to American Water Works's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for American Water Works's Analysis


How does this work? The Comparative Investment Analysis determines the value of American Water Works by comparing American Water Works financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of American Water Works.

See the American Water Works cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in American Water Works.

Also, see the American Water Works's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and American Water Works's valuation conclusion for a quick summary.