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American States Water (AWR)
NYSE:AWR
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American States Water
(NYSE:AWR)
69Neutral
Positive Factors
Earnings
Q4/FY’24 EPS were above the prior-year quarter’s results.
ESG Dynamics
ESG flow dynamics could support water stocks, including AWR, as traditional ESG favorites pivot strategies.
Regulatory Approval
AWR received final approval for its California general rate case settlement.
Negative Factors
Earnings Outlook
Limited events are available to drive the EPS forecast outlook higher in the coming 12 months.
Regulatory Challenges
The PD denies GSWC’s requests to implement a new revenue decoupling mechanism.
Valuation
AWR trades at a premium to water peers and to the broader electric and gas utility group, making it one of the highest-premium utilities under coverage.
American States Water (AWR) vs. S&P 500 (SPY)
Market Cap
$3.03B
Dividend Yield2.32%
Average Volume (3M)248.50K
Price to Earnings (P/E)24.8
Beta (1Y)0.23
Revenue Growth-0.04%
EPS Growth-5.82%
CountryUS
Employees517
SectorUtilities
Sector Strength94
IndustryRegulated Water
Share Statistics
EPS (TTM)3.17
Shares Outstanding38,508,495
10 Day Avg. Volume217,501
30 Day Avg. Volume248,504
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.83
Price to Cash Flow (P/CF)11.30
P/FCF Ratio0.00
Enterprise Value/Market Cap1.28
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.50
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$73.50Price Target Upside-6.94% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
American States Water Business Overview & Revenue Model
Company DescriptionAmerican 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.
How the Company Makes MoneyAmerican States Water Company generates revenue primarily through its regulated utility operations and contracted services. The company's key revenue streams include water and electric utility services provided to residential, commercial, and industrial customers, as well as long-term contracts with the U.S. government for water and wastewater system operations at military bases. The regulated nature of its utility operations ensures a steady income stream, as rates are set by public utilities commissions, allowing the company to recover costs and earn a reasonable return on investments. Additionally, AWR benefits from infrastructure investment opportunities and regulatory mechanisms that support capital recovery and operational efficiency improvements.
American States Water Financial Statement Overview
Summary
American States Water presents a generally stable financial position typical for a regulated utility, with strong profitability margins and a solid equity base. However, high leverage and negative free cash flow highlight potential areas of concern, particularly concerning debt management and cash flow sustainability. Strategic improvements in operational efficiencies and capital expenditure control could enhance financial resilience.Income Statement
American States Water shows stable revenue with minor fluctuations over the years. The gross profit margin is robust, given the nature of the industry, showing a high percentage in the latest year. However, the slight decline in EBIT margin suggests increasing operational costs or competitive pressures. Net profit margin has remained strong, reflecting efficient cost management. Overall, the income statement indicates consistent performance with room for operational efficiency improvements.75
Positive
Balance Sheet
The company's balance sheet reflects a strong equity position with a favorable equity ratio indicating financial stability. However, the debt-to-equity ratio is relatively high, suggesting a significant reliance on debt for financing, which could be a potential risk if interest rates rise. Return on equity is healthy, underscoring a decent return for shareholders. Overall, the balance sheet is solid but could benefit from a reduced leverage strategy.70
Positive
Cash Flow
Cash flow analysis shows a concerning trend with negative free cash flow, largely due to high capital expenditures. Free cash flow to net income ratio indicates cash flow challenges relative to profitability. Operating cash flow to net income ratio is unavailable for the latest period, but previous figures suggest operational cash generation issues. Improvements in capital management could enhance cash flow stability.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 595.46M | 595.70M | 491.53M | 498.85M | 488.24M | Gross Profit |
| 595.46M | 449.55M | 368.23M | 377.82M | 368.84M | EBIT |
| 184.48M | 196.74M | 126.64M | 140.98M | 130.50M | EBITDA |
| 244.05M | 252.54M | 170.78M | 185.06M | 171.04M | Net Income Common Stockholders |
| 119.27M | 124.92M | 78.40M | 94.35M | 86.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.91M | 14.07M | 6.00M | 4.96M | 36.74M | Total Assets |
| 2.50B | 2.25B | 2.03B | 1.90B | 1.79B | Total Debt |
| 938.24M | 917.88M | 734.43M | 629.02M | 586.55M | Net Debt |
| 911.57M | 903.81M | 728.43M | 624.05M | 549.82M | Total Liabilities |
| 1.58B | 1.47B | 878.28M | 802.86M | 709.58M | Stockholders Equity |
| 920.05M | 776.11M | 1.16B | 1.10B | 1.08B |
| Cash Flow | Free Cash Flow | |||
| -33.23M | -120.86M | -48.44M | -28.93M | -8.25M | Operating Cash Flow |
| 198.73M | 67.68M | 117.80M | 115.58M | 122.17M | Investing Cash Flow |
| -232.78M | -188.76M | -167.10M | -145.09M | -131.61M | Financing Cash Flow |
| 46.64M | 129.16M | 50.34M | -2.27M | 44.84M |
American States Water Technical Analysis
Positive
78.98
Price Trends
77.50
Positive
76.92
Positive
79.33
Negative
Market Momentum
0.72
Negative
52.91
Neutral
45.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWR, the sentiment is Positive. The current price of 78.98 is above the 20-day moving average (MA) of 78.54, above the 50-day MA of 77.50, and below the 200-day MA of 79.33, indicating a neutral trend. The MACD of 0.72 indicates Negative momentum. The RSI at 52.91 is Neutral, neither overbought nor oversold. The STOCH value of 45.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AWR.
American States Water Risk Analysis
American States Water disclosed 48 risk factors in its most recent earnings report. American States Water reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American States Water Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.84B | 18.76 | 7.23% | 3.01% | 11.65% | 6.78% | |
77 Outperform | $2.96B | 15.30 | 12.46% | 2.29% | 30.48% | 267.73% | |
76 Outperform | $1.10B | 24.92 | 10.17% | 2.16% | 15.40% | 40.04% | |
76 Outperform | $351.50M | 17.23 | 8.69% | 3.48% | 9.20% | 18.90% | |
71 Outperform | $11.10B | 18.57 | 9.84% | 3.20% | 1.57% | 16.50% | |
69 Neutral | $3.03B | 24.85 | 14.01% | 2.32% | -0.04% | -5.82% | |
63 Neutral | $8.57B | 12.54 | 6.26% | 4.38% | 3.11% | -10.24% |
* Utilities Sector Average
Performance Comparison
AWR
American States Water
78.98
10.33
15.05%
WTRG
Essential Utilities
40.28
5.02
14.24%
ARTNA
Artesian Resources
34.13
0.20
0.59%
CWT
California Water Service
49.55
2.28
4.82%
MSEX
Middlesex Water Company
61.45
12.15
24.65%
SJW
SJW
53.51
1.28
2.45%
American States Water Earnings Call Summary
Earnings Call Date:Feb 19, 2025
(Q4-2024)
| % Change Since: 5.91%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with strong financial results, regulatory approvals, and continued investment in infrastructure. However, challenges such as increased operating expenses and the rejection of certain regulatory mechanisms temper the overall positive sentiment.Q4-2024 Updates
Positive Updates
Regulatory Approvals and Investments
Received final decisions from the California Public Utilities Commission for both water and electric utility subsidiaries, enabling continued infrastructure investment. Authorized to invest $573.1 million in water infrastructure and $75.6 million in electric infrastructure over the respective rate cycles.
Strong Financial Performance
Achieved a return on equity of 14.1% for 2024 despite a 14.2% increase in average consolidated equity balance. Earnings per share excluding 2023 adjustments increased by $0.32 compared to the previous year.
Dividend Growth
Increased dividend to shareholders by 8.3%, marking 7 consecutive years of annual dividend increases.
Record Capital Investments
Invested $235.5 million in infrastructure at regulated utilities and secured $56.5 million in new capital upgrade awards at ASUS, both record highs.
Expansion of Military Contracts
ASUS began operations under two new military contracts, expanding the management of water and wastewater systems for the U.S. government.
Increased Revenue
Consolidated revenue for the fourth quarter increased by $17.9 million compared to 2023, with water, electric, and ASUS segments contributing to the growth.
Negative Updates
Higher Operating and Interest Expenses
Increased operating and interest expenses partially offset the earnings increase, impacting overall financial performance.
Dilutive Effects from Equity Issuance
Issuance of equity under the at-the-market offering program decreased consolidated earnings by approximately $0.04 per share.
Rejection of Regulatory Mechanisms
The CPUC rejected several requested regulatory mechanisms, including a full sales and revenue decoupling mechanism and a full supply cost balancing account.
Company Guidance
The American States Water Company conference call provided a comprehensive overview of the company's financial performance and strategic initiatives for the fourth quarter and full year of 2024. Key metrics highlighted include a $0.19 drop in reported earnings per share compared to the previous year, yet a $0.32 increase in adjusted earnings per share when excluding favorable variances from 2023. The company invested $235.5 million in regulated utility infrastructure and secured $56.5 million in new capital upgrade awards through ASUS, marking record highs. American States Water achieved a return on equity of 14.1% and increased its dividend by 8.3%, reflecting seven consecutive years of annual increases. Operating cash flow saw a significant rise to $198.7 million, primarily due to new rates and retroactive revenue collections. Looking forward, the company anticipates $170 million to $210 million in capital expenditures for 2025, with $60 million in equity issuance expected under its at-the-market program.American States Water Corporate Events
Executive/Board Changes
American States Water Approves 2025 Incentive Program
Neutral
Mar 28, 2025
On March 27, 2025, American States Water Company’s Compensation Committee approved the 2025 Short-Term Incentive Program for its executive officers. The program includes both objective and discretionary cash bonuses based on performance targets and subjective assessments, impacting the compensation structure for key executives.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.