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Reasons to Add American States Water Stock to Your Portfolio Now
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American States Water’s (AWR - Free Report) ongoing investments in infrastructure upgrades should allow it to provide quality services to its expanding customer base. Given its growth opportunities, AWR makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment option at the moment.
AWR’s Growth Projections & Surprise History
The Zacks Consensus Estimate for AWR’s 2024 earnings per share (EPS) has moved north 0.7% to $3.03 in the past 60 days.
The Zacks Consensus Estimate for AWR’s 2025 EPS has increased 1.5% to $3.35 in the past 60 days.
AWR’s long-term (three to five years) earnings growth rate is 6.3%. It delivered an average earnings surprise of 3.4% in the past four quarters.
AWR’s Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, American States Water’s ROE is 13.45%, higher than the industry’s average of 11.51%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility water supply industry.
AWR’s Debt Position
Currently, AWR’s total debt to capital is 52.88%, better than the industry’s average of 54.63%.
The time to interest earned ratio at the end of second-quarter 2024 was 3.9. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
AWR’s Dividend History
American States Water has been a steady dividend payer. It has paid dividends to shareholders every year since 1931. AWR’s objective is to hike its dividend rate and witness a CAGR of more than 7% over the long term.
Currently, American States Water’s quarterly dividend is 46.55 cents per share, up 8.3% from the previous quarter’s 43 cents. The new dividend resulted in an annualized dividend of $1.862 per share. The company’s current dividend yield is 2.29%, better than the Zacks S&P 500 composite’s 1.29%.
AWR’s Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The regulated utilities expect capital expenditures of $573.1 million during 2025-2027. New rates should help the company recover the amount invested to improve its infrastructure and continue with its infrastructure upgrade initiatives.
AWR’s Stock Price Performance
In the past three months, the stock has returned 15.5% compared with the industry’s 14.3% growth.
AWK’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 1.1% in the past four quarters.
SJW’s long-term earnings growth rate is 7.5%. The Zacks Consensus Estimate for SJW’s 2024 EPS is pegged at $2.76, implying a year-over-year improvement of 3%.
XEL’s long-term earnings growth rate is 6.4%. The company delivered an average earnings surprise of 0.7% in the trailing four quarters.
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Reasons to Add American States Water Stock to Your Portfolio Now
American States Water’s (AWR - Free Report) ongoing investments in infrastructure upgrades should allow it to provide quality services to its expanding customer base. Given its growth opportunities, AWR makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment option at the moment.
AWR’s Growth Projections & Surprise History
The Zacks Consensus Estimate for AWR’s 2024 earnings per share (EPS) has moved north 0.7% to $3.03 in the past 60 days.
The Zacks Consensus Estimate for AWR’s 2025 EPS has increased 1.5% to $3.35 in the past 60 days.
AWR’s long-term (three to five years) earnings growth rate is 6.3%. It delivered an average earnings surprise of 3.4% in the past four quarters.
AWR’s Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, American States Water’s ROE is 13.45%, higher than the industry’s average of 11.51%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility water supply industry.
AWR’s Debt Position
Currently, AWR’s total debt to capital is 52.88%, better than the industry’s average of 54.63%.
The time to interest earned ratio at the end of second-quarter 2024 was 3.9. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
AWR’s Dividend History
American States Water has been a steady dividend payer. It has paid dividends to shareholders every year since 1931. AWR’s objective is to hike its dividend rate and witness a CAGR of more than 7% over the long term.
Currently, American States Water’s quarterly dividend is 46.55 cents per share, up 8.3% from the previous quarter’s 43 cents. The new dividend resulted in an annualized dividend of $1.862 per share. The company’s current dividend yield is 2.29%, better than the Zacks S&P 500 composite’s 1.29%.
AWR’s Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The regulated utilities expect capital expenditures of $573.1 million during 2025-2027. New rates should help the company recover the amount invested to improve its infrastructure and continue with its infrastructure upgrade initiatives.
AWR’s Stock Price Performance
In the past three months, the stock has returned 15.5% compared with the industry’s 14.3% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are American Water Works (AWK - Free Report) , SJW Group (SJW - Free Report) and Xcel Energy (XEL - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AWK’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 1.1% in the past four quarters.
SJW’s long-term earnings growth rate is 7.5%. The Zacks Consensus Estimate for SJW’s 2024 EPS is pegged at $2.76, implying a year-over-year improvement of 3%.
XEL’s long-term earnings growth rate is 6.4%. The company delivered an average earnings surprise of 0.7% in the trailing four quarters.