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Reasons to Add American States Water (AWR) to Your Portfolio Now
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American States Water’s (AWR - Free Report) strategic investments in infrastructure upgrades will 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) stock a strong investment option at the moment.
Growth Projections
The Zacks Consensus Estimate for AWR’s 2023 earnings per share (EPS) has moved north 0.7% to $2.98 in the past 60 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pinned at $603 million, implying a year-over-year increase of 22.7%.
AWR’s long-term (three to five years) earnings growth rate is 6.3%.
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 13.6%, higher than the industry’s average of 9.58%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility water supply industry.
Debt Position
At the end of third-quarter 2023, AWR’s total debt to capital was 52.41%, much better than the sector’s average of 58.48%.
The time to interest earned ratio at the end of third-quarter 2023 was 5.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
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.
In October 2023, the board of directors declared a quarterly dividend of 43 cents per share, which resulted in an annualized dividend of $1.72 per share. The company’s current dividend yield is 2.04%, better than the Zacks S&P 500 Composite’s yield of 1.41%.
Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The regulated utilities invested $167.4 million in company-funded capital projects in 2022 and expect capital expenditures in the range of $140-$160 million for 2023. These systematic investments drove the rate base from $752.2 million in 2018 to $1,152.3 million in 2022.
Price Performance
In the past three months, the stock has returned 0.6% against the industry’s 36.3% decline.
GWRS’ long-term earnings growth rate is 15%. The company delivered an average earnings surprise of 27.1% in the last four quarters.
The Zacks Consensus Estimate for YORW’s 2023 EPS is pegged at $1.59, implying a year-over-year improvement of 13.6%. The company delivered an average earnings surprise of 6.7% in the last four quarters.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.
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Reasons to Add American States Water (AWR) to Your Portfolio Now
American States Water’s (AWR - Free Report) strategic investments in infrastructure upgrades will 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) stock a strong investment option at the moment.
Growth Projections
The Zacks Consensus Estimate for AWR’s 2023 earnings per share (EPS) has moved north 0.7% to $2.98 in the past 60 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pinned at $603 million, implying a year-over-year increase of 22.7%.
AWR’s long-term (three to five years) earnings growth rate is 6.3%.
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 13.6%, higher than the industry’s average of 9.58%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility water supply industry.
Debt Position
At the end of third-quarter 2023, AWR’s total debt to capital was 52.41%, much better than the sector’s average of 58.48%.
The time to interest earned ratio at the end of third-quarter 2023 was 5.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
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.
In October 2023, the board of directors declared a quarterly dividend of 43 cents per share, which resulted in an annualized dividend of $1.72 per share. The company’s current dividend yield is 2.04%, better than the Zacks S&P 500 Composite’s yield of 1.41%.
Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The regulated utilities invested $167.4 million in company-funded capital projects in 2022 and expect capital expenditures in the range of $140-$160 million for 2023. These systematic investments drove the rate base from $752.2 million in 2018 to $1,152.3 million in 2022.
Price Performance
In the past three months, the stock has returned 0.6% against the industry’s 36.3% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Global Water Resources (GWRS - Free Report) , The York Water Company (YORW - Free Report) and Consolidated Water Co. Ltd. (CWCO - 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.
GWRS’ long-term earnings growth rate is 15%. The company delivered an average earnings surprise of 27.1% in the last four quarters.
The Zacks Consensus Estimate for YORW’s 2023 EPS is pegged at $1.59, implying a year-over-year improvement of 13.6%. The company delivered an average earnings surprise of 6.7% in the last four quarters.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.