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Reasons to Add AWR Stock to Your Portfolio Right Now

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Key Takeaways

  • AWR's 2025 EPS estimate rose to $3.32, with revenues expected to grow 5.63% year over year.
  • The company delivers steady dividends, supported by utility growth and long-term military contracts.
  • AWR plans to invest $537.1 million during 2025-2027 to strengthen operations.

American States Water (AWR - Free Report) focuses on upgrading its infrastructure to provide reliable services to its expanding customer base. The company ensures a consistent revenue flow through the long-term contracts its subsidiary, ASUS, holds with military bases. Given its strong growth and better debt management, AWR makes for a solid investment option in the Zacks Utility -Water Supply industry.

Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.

AWR’s Growth Outlook & Surprise History

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 1.22% to $3.32 in the past 60 days. 

The Zacks Consensus Estimate for 2025 revenues is pegged at $629 million, which indicates growth of 5.63% from the 2024 reported figure.

AWR’s long-term (three to five years) earnings growth rate is 5.65%.

Its earnings beat on estimates in three of the trailing four quarters and missed the same in one, resulting in an average surprise of 3.63%.

AWR’s Return to Shareholders

American states water has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is 50 cents per share, resulting in an annualized dividend of $2.02. AWR’s current dividend yield is 2.68%, better than the Zacks S&P 500 composite's average of 1.51%.

AWR’s Infrastructure Upgradation & Investment Focus

AWR has strong customer base in utility and is steadily adding new electricity and water utility customers to its existing base. The company also benefits from new rates, which increase revenues and earnings, while contributions from long-term military projects further boost its revenues.

AWR plans to invest $573.1 million during 2025-2027 to strengthen infrastructure and existing operations. New rate filings and subsequent rate increases will help the company recover the amounts invested in upgrading and improving its infrastructure, and will support continued infrastructure upgrade initiatives.

Overview of AWR’s Debt Structure

Currently, AWR’s total debt to capital is 47.54%, better than the industry’s average of 60.90%.

AWR’s times interest earned ratio (TIE) at the end of the third quarter of 2025 was 4.5. The TIE ratio greater than one suggests that the company will be able to make its interest payment obligations in the near term without difficulty.

AWR Stock Price Performance

In the past month, AWR’s shares have lost 0.3% compared with the industry’s decline of 1.2%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks from the same industry are Ameren (AEE - Free Report) , CenterPoint Energy (CNP - Free Report) and Atmos Energy (ATO - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AEE’s long-term earnings growth rate is 8.01%. The Zacks Consensus Estimate for 2025 EPS is pegged at $4.99, which calls for a year-over-year jump of 7.78%.

CNP’s long-term earnings growth rate is 7.93%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.76, which implies a year-over-year rise of 8.64%.

ATO’s long-term earnings growth rate is 7.49%. The Zacks Consensus Estimate for fiscal 2026 EPS is pegged at $8.01, which suggests year-over-year growth of 7.37%.

 

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