Back to top

Analyst Blog

On Jan 9, Zacks Investment Research upgraded American States Water Company (AWR - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Consistent performance from this water utility and strong third-quarter results sparked upward earnings estimate revisions.  Moreover, this utility delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 17.6%. The long-term expected earnings growth rate for this stock is 6.0%    

American States Water Company reported third-quarter earnings on Nov 5. Non-GAAP earnings per share of 97 cents per share surpassed the Zacks Consensus Estimate by 21.2% and outpaced the year-ago figure by 16.9%.

Impressive performance from its Water and Contracted Services segments helped total revenue to reach $133.5 million and beat the year ago results by 11.5%.

During the quarter the company successfully curtailed net interest expenses by 12.7% to $5.4 million from $6.1 million incurred in the year-ago period. The reduction in short-term borrowing and higher interest income led to the decline in net expenses.

Consistent dividend payments since 1931 make the shares attractive. An annual dividend of $1.42 per share results in a dividend yield of 2.9%, higher than the industry average of 1.86%.

The average capital expenditure program of $85 million per year for 2013 through 2015 will enable the company to complete water projects to meet consumer demand.

The Zacks Consensus Estimate for 2012 moved higher by 19.1% to $2.66 per share over the last 60 days, as all 5 estimates were raised. The Zacks Consensus Estimate for 2013 increased 1.98% to $2.71 per share over the same period, as all 7 estimates climbed up.

Other Stocks to Consider

Besides this company, a few other water utilities are also performing well and have a favorable Zacks Rank. The stocks worth considering are American Water Works Company Inc. (AWK - Snapshot Report) and Aqua America Inc. (WTR - Snapshot Report). Both currently have a short-term Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.98 +10.17%
CANADIAN SO… CSIQ 38.30 +8.07%
CENTURY ALU… CENX 26.97 +7.97%
BANCO DO BR… BDORY 16.76 +7.92%
WILLDAN GRO… WLDN 11.38 +5.86%