American States Water AWR is benefiting from a regulated structure, rising demand driven by an expanding customer base, implementation of new rates and a diversified business model supporting revenues and earnings growth. The company’s strategic capital investments for infrastructure upgrades and replacement enhance service reliability and boost its long-term growth strategy.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
AWR’s Growth Projection
The Zacks Consensus Estimate for AWR’s 2026 and 2027 earnings per share (EPS) have moved up 3.34% and 1.87%, respectively, over the past 60 days.
The Zacks Consensus Estimate for AWR’s 2026 and 2027 EPS is pinned at $3.71 and $3.82, indicating year-over-year growth of 10.09% and 2.83%, respectively.
AWR’s long-term (three to five years) earnings growth rate is 6.93%.
AWR’s Stable Investments
American States Water makes regular capital investments in infrastructure development and maintenance, enabling it to provide high-quality service to its customers. AWR invested $42.1 million in the first quarter of 2026 in its regulated utilities and plans to invest $185-$225 million during 2026 in infrastructure development to enhance operational efficiency and support long-term growth.
AWR’s Capital Return Program
American States Water has been rewarding its shareholders with dividend hikes, reflecting stable earnings and strong cash flow. The company has increased dividends in each calendar year for the last 71 consecutive years.
AWR has a dividend yield of 2.57% versus the Zacks S&P 500 composite’s average of 1.46%. Currently, the company’s quarterly dividend is 50.4 cents, resulting in an annualized dividend of $2.02 per share.
AWR’s Debt Position
AWR’s times interest earned ratio (TIE) at the end of the first quarter of 2026 was 4.7. The TIE ratio is a key solvency metric that indicates how effectively a company can meet its long-term debt obligations, reflects how operating earnings cover interest expenses and overall financial stability.
AWR’s total debt-to-capital is 46.45%, which is lower than the industry’s 54.63%, indicating stronger financial stability and lower leverage risk.
Price Performance of AWR
In the past six months, American States Water shares have rallied 7.1% compared with the industry’s 1% growth.
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Other Stocks to Consider
Some other top-ranked stocks from the same sector are Duke Energy DUK, Consolidated Edison ED and PG&E Corporation PCG. All the stocks carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DUK and ED, PCG have dividend yields of 3.41%, 3.30% and 1.20%, respectively, which are better than the Zacks S&P 500 Composite’s yield of 1.46%.
The Zacks Consensus Estimate for Duke Energy, Consolidated Edison and PG&E 2026 EPS are pegged at $6.71, $6.09 and $1.65, suggesting year-over-year growth of 6.34%, 6.84%, and 10%, respectively.
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Pacific Gas & Electric Co. (PCG): Free Stock Analysis Report
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American States Water Company (AWR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).