American States Water Company AWR, along with its subsidiaries Golden State Water Company and American States Utility Services, provides fresh water, wastewater services, and electricity to customers in the U.S.
AWR has three reportable segments: Water, Electric, and Contracted Services; each contributed 67.5%, 8.3% and 24.2% to total revenues in 2019, respectively.
For Q4, consolidated diluted EPS of 45 cents a chare beat the Zacks Consensus Estimate and grew 22% year-over-year. AWR also reported increased EPS in all of its business segments in 2019.
Cash flow remains steady thanks so the company’s primary water utility.
And with American States Utility Services, which serves privatized military bases in the U.S. under 50-year contracts, AWR essentially takes care of all water distribution and waste water collection and treatment for these bases.
This is a resilient business for AWR to have under its umbrella, especially during the current market volatility.
Earnings & Dividend Growth
Shares of AWR are up about 31% over the last one year, and have only lost 4% in value in the past three months. Earnings estimates have been rising, and American States Water Co. is a Zacks Rank #1 (Strong Buy) right now.
For the current fiscal year, one analyst has revised their bottom line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up seven cents from $2.16 to $2.23 per share; earnings could see positive growth compared to the prior year period, too. 2021 looks pretty strong as well, with earnings and revenue expected to continue positive year-over-year growth.
While AWR’s 1.3% dividend yield may seem smaller compared to other utilities, it’s proven to be a great play for income investors. The company has not only paid a dividend every year since 1931, but increased its cash payout every year for the last 65 years. This gives AWR the coveted title of “Dividend King.”
Plus, management remains confident that it will be able to grow its dividend at a CAGR of 7% for the long-term.
If you’re an investor searching for a solid utility stock to add to your portfolio, make sure to keep AWR on your shortlist.
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