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AWR vs. CWT: Which Water Utility Stock Offers Better Growth in 2026?
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Key Takeaways
AWR outpaces CWT with higher ROE, lower debt-to-capital, and stronger recent price gains.
CWT projects faster EPS growth, with 19.07% rise in 2026 compared with 6.5% rise for AWR.
AWR benefits from diversified operations, rate hikes, and steady infrastructure investments.
The companies under the Zacks Utility - Water Supply industry provide safe and reliable water and wastewater service to millions of consumers across the United States. The U.S. water and wastewater industry operates through 2.2 million miles of aging pipelines.
The water and wastewater industry is highly fragmented, with more than 50,000 community water systems and nearly 14,000 wastewater treatment systems providing services to the customers. Companies are making regular investments to upgrade and maintain their aging infrastructure, enabling them to maintain service reliability. The regulated structure enables these companies to recover costs through authorized rate hikes and rewards shareholders through dividends.
Given the importance of water and wastewater service provider companies, let us discuss American States Water Company (AWR - Free Report) and California Water Service Group (CWT - Free Report) . These two regulated utilities are benefiting from rising demand, rate hike and significant infrastructure investments, making them comparable players within the industry.
American States Water stands out with its regulated structure that efficiently serves water and electricity customers through its three subsidiaries. The company is benefiting from an expanding customer base, new rates and a diversified business model that supports revenue and earnings growth. Its strategic investment plans support the upgrade, maintenance and replacement of its aging infrastructure, enhancing service reliability and strengthening long-term growth.
California Water ranks among the largest investor-owned water utilities in the United States and operates through seven subsidiaries. It operates through both regulated and non-regulated structures and efficiently serves about 2 million customers in 100 communities. The company is gaining from rising demand from its expanding customer base, driven by both acquisitions and organic growth. Its disciplined investment strategy supports infrastructure development, improves operational efficiency, enhances service reliability and boosts long-term financial performance.
American States Water and California Water are among the leading utilities. Examining their fundamentals side by side can reveal which stock presents the most attractive investment opportunity.
AWR & CWT’s Earnings Growth Projections
The Zacks Consensus Estimate for CWT’s earnings per share is pegged at $2.56 in 2026 and $2.73 in 2027, suggesting year-over-year growth of 19.07% and 6.77%, respectively. CWT’s long-term (three to five years) earnings growth is currently pinned at 10.62%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AWR’s earnings per share is pegged at $3.59 in 2026 and $3.75 in 2027, suggesting year-over-year growth of 6.53% and 4.46%, respectively. AWR’s long-term earnings growth is currently pinned at 5.65%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive sector, and continuous investment is required for infrastructure modernization, maintenance and replacement. It helps to improve operational efficiency, enhance service reliability and support growing demand. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth.
American States Water's debt-to-capital currently stands at 47.13% compared with California Water’s 48.67%. Both companies are using debt to fund their business. Both AWR and CWT’s debt levels are lower than the industry’s 53.34%, with CWT slightly higher than AWR, indicating greater reliance on borrowed funds.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) reflects how efficiently a company utilizes shareholders’ funds to generate profit. It plays a vital role in evaluating management efficiency and overall financial performance, highlighting how efficiently resources are used to generate sustainable growth.
American States Water's current ROE is 13.1%, outperforming California Water, which reports a lower ROE of 7.67%. AWR utilizes shareholder capital more efficiently and generates higher returns, though the company’s returns remain slightly below the industry average of 13.72%.
Image Source: Zacks Investment Research
AWR & CWT’s Dividend Yield
Dividends are regular payments distributed by a utility company to reward its shareholders, reflecting the company’s earnings stability and strong cash flow. They offer investors commitment to delivering consistent returns on invested capital.
Currently, the dividend yield for California Water is 2.90%, while that for American States Water is 2.59%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.39%.
Capital Investment Plans
U.S. water utilities' operation is capital-intensive, as huge funds are required for upgrading aging water and wastewater infrastructure to ensure safe and reliable service for customers. According to the Environmental Protection Agency, an investment of $1.25 trillion will be required over the next 20 years to maintain and expand water services.
California Water aims to invest $760 million and $690 million in 2026 and 2027, respectively, to strengthen infrastructure, improve operational efficiency and maintain service reliability. American States Water plans a strategic capital investment of $185-$225 million in 2026 to support infrastructure development, enhance service reliability and boost long term financial performance.
Price Performance
American States Water has gained 5.8% over the past month compared with California Water's 4% rally.
Image Source: Zacks Investment Research
Summing Up
American States Water and California Water both gain from rising demand driven by an expanding customer base and new rates and are making substantial infrastructure investments to serve millions of customers across the United States.
American States Water’s stable earnings per share growth, stronger ROE, lower debt-to-capital ratio and better price performance make it a more attractive choice in the utility sector.
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AWR vs. CWT: Which Water Utility Stock Offers Better Growth in 2026?
Key Takeaways
The companies under the Zacks Utility - Water Supply industry provide safe and reliable water and wastewater service to millions of consumers across the United States. The U.S. water and wastewater industry operates through 2.2 million miles of aging pipelines.
The water and wastewater industry is highly fragmented, with more than 50,000 community water systems and nearly 14,000 wastewater treatment systems providing services to the customers. Companies are making regular investments to upgrade and maintain their aging infrastructure, enabling them to maintain service reliability. The regulated structure enables these companies to recover costs through authorized rate hikes and rewards shareholders through dividends.
Given the importance of water and wastewater service provider companies, let us discuss American States Water Company (AWR - Free Report) and California Water Service Group (CWT - Free Report) . These two regulated utilities are benefiting from rising demand, rate hike and significant infrastructure investments, making them comparable players within the industry.
American States Water stands out with its regulated structure that efficiently serves water and electricity customers through its three subsidiaries. The company is benefiting from an expanding customer base, new rates and a diversified business model that supports revenue and earnings growth. Its strategic investment plans support the upgrade, maintenance and replacement of its aging infrastructure, enhancing service reliability and strengthening long-term growth.
California Water ranks among the largest investor-owned water utilities in the United States and operates through seven subsidiaries. It operates through both regulated and non-regulated structures and efficiently serves about 2 million customers in 100 communities. The company is gaining from rising demand from its expanding customer base, driven by both acquisitions and organic growth. Its disciplined investment strategy supports infrastructure development, improves operational efficiency, enhances service reliability and boosts long-term financial performance.
American States Water and California Water are among the leading utilities. Examining their fundamentals side by side can reveal which stock presents the most attractive investment opportunity.
AWR & CWT’s Earnings Growth Projections
The Zacks Consensus Estimate for CWT’s earnings per share is pegged at $2.56 in 2026 and $2.73 in 2027, suggesting year-over-year growth of 19.07% and 6.77%, respectively. CWT’s long-term (three to five years) earnings growth is currently pinned at 10.62%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AWR’s earnings per share is pegged at $3.59 in 2026 and $3.75 in 2027, suggesting year-over-year growth of 6.53% and 4.46%, respectively. AWR’s long-term earnings growth is currently pinned at 5.65%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive sector, and continuous investment is required for infrastructure modernization, maintenance and replacement. It helps to improve operational efficiency, enhance service reliability and support growing demand. These utilities combine internally generated cash flows with borrowed funds from capital markets to finance long-term investments, ensuring steady growth.
American States Water's debt-to-capital currently stands at 47.13% compared with California Water’s 48.67%. Both companies are using debt to fund their business. Both AWR and CWT’s debt levels are lower than the industry’s 53.34%, with CWT slightly higher than AWR, indicating greater reliance on borrowed funds.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) reflects how efficiently a company utilizes shareholders’ funds to generate profit. It plays a vital role in evaluating management efficiency and overall financial performance, highlighting how efficiently resources are used to generate sustainable growth.
American States Water's current ROE is 13.1%, outperforming California Water, which reports a lower ROE of 7.67%. AWR utilizes shareholder capital more efficiently and generates higher returns, though the company’s returns remain slightly below the industry average of 13.72%.
Image Source: Zacks Investment Research
AWR & CWT’s Dividend Yield
Dividends are regular payments distributed by a utility company to reward its shareholders, reflecting the company’s earnings stability and strong cash flow. They offer investors commitment to delivering consistent returns on invested capital.
Currently, the dividend yield for California Water is 2.90%, while that for American States Water is 2.59%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.39%.
Capital Investment Plans
U.S. water utilities' operation is capital-intensive, as huge funds are required for upgrading aging water and wastewater infrastructure to ensure safe and reliable service for customers. According to the Environmental Protection Agency, an investment of $1.25 trillion will be required over the next 20 years to maintain and expand water services.
California Water aims to invest $760 million and $690 million in 2026 and 2027, respectively, to strengthen infrastructure, improve operational efficiency and maintain service reliability. American States Water plans a strategic capital investment of $185-$225 million in 2026 to support infrastructure development, enhance service reliability and boost long term financial performance.
Price Performance
American States Water has gained 5.8% over the past month compared with California Water's 4% rally.
Image Source: Zacks Investment Research
Summing Up
American States Water and California Water both gain from rising demand driven by an expanding customer base and new rates and are making substantial infrastructure investments to serve millions of customers across the United States.
American States Water’s stable earnings per share growth, stronger ROE, lower debt-to-capital ratio and better price performance make it a more attractive choice in the utility sector.
Based on the above discussion, American States Water currently has an edge over California Water, though both presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.