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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 2024 earnings per share (EPS) has moved 1.7% north to $3.01 in the past 60 days.
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 8.68%. 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 fourth-quarter 2023, AWR’s total debt to capital was 53.95%, better than the industry’s average of 54.61%.
The time to interest earned ratio at the end of fourth-quarter 2023 was 4.9. 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.
The company’s current dividend yield is 2.4%, better than the Zacks S&P 500 Composite’s 1.5%.
Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The company has plans to invest $611.4 million in the 2025-2027 period to further strengthen its operations.
Price Performance
In the past month, the stock fell 3.3% against the industry’s 1.1% growth. The slackness in price offers a good opportunity to add the stock at low rates.
PRMW’s long-term earnings growth rate is 12.9%. The Zacks Consensus Estimate for 2024 EPS has increased 17.3% in the past 60 days.
YORW’s current dividend yield is 2.36%, which is better than the Zacks S&P 500 Composite’s 1.54%. The company delivered an average earnings surprise of 8.5% in the last four quarters.
CWCO’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for 2024 EPS has increased 1.6% in the past 60 days.
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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 2024 earnings per share (EPS) has moved 1.7% north to $3.01 in the past 60 days.
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 8.68%. 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 fourth-quarter 2023, AWR’s total debt to capital was 53.95%, better than the industry’s average of 54.61%.
The time to interest earned ratio at the end of fourth-quarter 2023 was 4.9. 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.
The company’s current dividend yield is 2.4%, better than the Zacks S&P 500 Composite’s 1.5%.
Systematic Investments
Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The company has plans to invest $611.4 million in the 2025-2027 period to further strengthen its operations.
Price Performance
In the past month, the stock fell 3.3% against the industry’s 1.1% growth. The slackness in price offers a good opportunity to add the stock at low rates.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Primo Water (PRMW - 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.
PRMW’s long-term earnings growth rate is 12.9%. The Zacks Consensus Estimate for 2024 EPS has increased 17.3% in the past 60 days.
YORW’s current dividend yield is 2.36%, which is better than the Zacks S&P 500 Composite’s 1.54%. The company delivered an average earnings surprise of 8.5% in the last four quarters.
CWCO’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for 2024 EPS has increased 1.6% in the past 60 days.