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1. Company Snapshot

1.a. Company Description

American States Water Company, through its subsidiaries, provides water and electric services to residential, commercial, industrial, and other customers in the United States.It operates through three segments: Water, Electric, and Contracted Services.The company purchases, produces, distributes, and sells water, as well as distributes electricity.


As of December 31, 2021, American States Water Company provided water service to 262,770 customers located throughout 10 counties in the State of California; and distributed electricity to 24,656 customers in San Bernardino County mountain communities in California.The company also provides water and/or wastewater services, including the operation, maintenance, and construction of facilities at the water and/or wastewater systems at various military installations.American States Water Company was incorporated in 1929 and is based in San Dimas, California.

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1.b. Last Insights on AWR

American States Water Company's recent performance was negatively impacted by high valuation risks, as highlighted by BofA Securities' downgrade from Neutral to Underperform. The company's Q4 earnings beat estimates, but operating expenses increased during the same period, which may be a concern. Additionally, the company's high valuation may deter investors, as BofA Securities lowered its price forecast from $85 to $71. However, the company's solid growth attributes, such as its strong earnings estimates revision agreement among Wall Street analysts, indicate potential for a trend reversal."

1.c. Company Highlights

2. American States Water's Q3 2025 Earnings: A Strong Performance

American States Water Company (AWR) reported a robust third-quarter 2025 earnings per share (EPS) of $1.06, surpassing the same quarter last year's EPS of $0.95 by 11.6%. The consolidated earnings per share increased to $1.06, beating analyst estimates of $1.01. The company's financial performance was driven by new water and electric rates authorized by the California Public Utilities Commission (CPUC) and higher earnings from American States Utility Services (ASUS). The water utility, Golden State Water, reported earnings of $0.86 per share, up $0.02 from the previous year, while the electric segment earnings were $0.04 per share, up $0.02 from the same quarter last year.

Publication Date: Nov -09

📋 Highlights
  • EPS Growth:: Q3 2025 EPS rose 11.6% to $1.06 from $0.95 in 2024, driven by new CPUC rates and ASUS performance.
  • ASUS Earnings Surge:: ASUS EPS increased $0.08 to $0.19, a 70.7% rise, fueled by higher construction activity.
  • Infrastructure Investment:: $180–210M in 2025 utility system investments, with ASUS securing $28.7M in new projects (Jan 2025–2028).
  • Dividend Growth:: 8.3% Q3 dividend raise, with a 5-year CAGR of 8.5%, reflecting sustained shareholder returns.
  • Rate Base Expansion:: Golden State Water’s rate base grew at a 10.4% CAGR (2022–2025), supported by $76M in upcoming 2025 rate filings.

Segment Performance

The ASUS segment was a significant contributor to the company's growth, with earnings of $0.19 per share, up $0.08 from the same quarter last year, driven by higher construction activity. The company continues to invest in its water and electric utility systems, with planned investments of $180 million to $210 million in infrastructure this year. As Robert Sprowls noted, the company is seeing robust activity in new development projects, which is expected to drive future growth.

Growth Prospects

AWR's rate base growth remains strong, with a 10.4% four-year compound annual growth rate (CAGR) at Golden State Water from 2022 to 2025. The company has a robust growth pipeline, with $28.7 million in new capital upgrade construction projects awarded during the first nine months of 2025, expected to be completed through 2028. The company's guidance for 2026 EPS is between $0.63 and $0.67, indicating a continued growth trajectory.

Valuation and Dividend

With a P/E Ratio of 23.12 and a Dividend Yield of 2.54%, AWR's valuation appears reasonable. The company's ROE of 13.37% and ROIC of 6.21% indicate a strong ability to generate returns on equity and invested capital. The recent dividend increase of 8.3% is also a positive development, bringing the company's CAGR of dividend growth to 8.5% over the last five years.

Outlook

The management expressed confidence in the company's growth prospects, and analysts estimate next year's revenue growth at 4.7%. With a strong track record of execution and a robust growth pipeline, AWR appears well-positioned for continued success. As Eva Tang explained, the company's rate base projection for 2025 was slightly lower than expected due to the timing of advice letter projects and depreciation, but the company will file for new rates effective January 1, 2025, which will include $76 million of advice letter projects.

3. NewsRoom

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American States Water Company (AWR) Q4 2025 Earnings Call Prepared Remarks Transcript

Feb -19

Source: seekingalpha.com

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American States Water Q4 Earnings & Revenues Increase Y/Y

Feb -19

Source: zacks.com

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American States Water Company Announces Fourth Quarter and Full Year 2025 Results

Feb -18

Source: businesswire.com

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4 Stocks to Watch From the Flourishing Water Supply Industry

Feb -17

Source: zacks.com

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Three No-Brainer Dividend Stocks to Buy Right Now

Feb -13

Source: fool.com

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American States Water Company Announces Regular Common Dividends

Feb -11

Source: businesswire.com

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American States Water Company to Report Fourth Quarter and Full Year 2025 Results

Feb -09

Source: businesswire.com

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AlphaQuest LLC Purchases New Stake in American States Water Company $AWR

Feb -03

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.34%)

6. Segments

Water

Expected Growth: 4.5%

American States Water Company's 4.5% growth is driven by increasing water demand in California, driven by population growth and drought conditions. Additionally, the company's focus on water conservation and efficiency measures, as well as its strategic acquisitions, contribute to its growth. Furthermore, the company's strong financial position and dividend yield attract investors, supporting its growth momentum.

Contracted Services

Expected Growth: 3.8%

The 3.8% growth in Contracted Services from American States Water Company is driven by increasing demand for water infrastructure maintenance and repair services, coupled with the company's strategic acquisitions and expansion into new markets. Additionally, the growing need for water conservation and efficiency measures, as well as the aging infrastructure in the US, contribute to the segment's growth.

Electric

Expected Growth: 4.2%

American States Water Company's 4.2% growth in Electric segment is driven by increasing demand for electricity in California, expansion of renewable energy sources, and investments in grid modernization. Additionally, the company's focus on energy efficiency programs and rate base growth contribute to the segment's growth.

7. Detailed Products

Water Utility Services

American States Water Company provides water utility services to residential, commercial, and industrial customers in California.

Electricity Services

The company offers electricity services to customers in Texas through its subsidiary, SouthWest Water Company.

Wastewater Services

American States Water Company provides wastewater services, including collection, treatment, and disposal, to customers in California.

Recycled Water Services

The company offers recycled water services, providing a sustainable and environmentally-friendly alternative to potable water for non-potable uses.

8. American States Water Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for American States Water Company is low due to the lack of alternative water sources for its customers.

Bargaining Power Of Customers

The bargaining power of customers is medium as they have some flexibility to choose from different water providers, but the switching costs are relatively high.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low as American States Water Company has a diversified supplier base and is not heavily dependent on a single supplier.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the water utility industry, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The intensity of rivalry is medium as American States Water Company operates in a competitive market with several other water utility companies, but the industry is subject to strict regulations that limit competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.18%
Debt Cost 6.08%
Equity Weight 45.82%
Equity Cost 6.08%
WACC 6.08%
Leverage 118.27%

11. Quality Control: American States Water Company passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Otter Tail

A-Score: 6.7/10

Value: 5.1

Growth: 7.0

Quality: 6.5

Yield: 6.0

Momentum: 7.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
ALLETE

A-Score: 6.5/10

Value: 5.7

Growth: 3.9

Quality: 4.4

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
NiSource

A-Score: 6.2/10

Value: 5.3

Growth: 3.3

Quality: 4.7

Yield: 6.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Essential Utilities

A-Score: 6.1/10

Value: 5.4

Growth: 5.6

Quality: 5.4

Yield: 6.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
American States Water

A-Score: 5.7/10

Value: 4.7

Growth: 5.2

Quality: 5.9

Yield: 5.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
California Water Service

A-Score: 5.5/10

Value: 5.1

Growth: 5.3

Quality: 5.1

Yield: 5.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

72.94$

Current Price

72.94$

Potential

-0.00%

Expected Cash-Flows