American States Water Company (NYSE:AWR) is included among the 12 Reliable Dividend Stocks for Maximum Income. American States Water (AWR): A Dividend Powerhouse with Decades of Stability Photo by Dan Dennis on Unsplash American States Water Company (NYSE:AWR) operates as a diversif‌ied util‌ity firm with mu‍ltiple subs‌idiaries across thr‍ee‌ main seg‌ment⁠s‍: water, electric, and contracted se‍rvice‌s. In recent years, the company​ has focused on strengt‌heni​n‌g its re‌gulated operations, upgrading ...

Group 1 - The article discusses the author's journey in dividend growth investing and the establishment of a blog to document this journey [1] - The author has been investing since September 2017 and has a long-standing interest in dividend investing since 2009 [1] - The blog serves as a platform for the author to share insights on dividend growth stocks and growth stocks occasionally [1] Group 2 - The author expresses gratitude for the blog's role in connecting with the Seeking Alpha community as an analyst [1] - There is a disclosure stating that the author has no current stock positions in any mentioned companies and no plans to initiate any positions in the near future [1]

Core Viewpoint - American States Water Company (AWR) is positioned to benefit from an expanding customer base and regulatory approvals, which enhance its financial performance, although it faces risks related to groundwater contamination and reliance on California for earnings [1][6][7]. Group 1: Growth Factors - AWR is steadily increasing its electricity and water utility customer base, contributing to its robust utility customer foundation [2]. - The subsidiary, American States Utility Services (ASUS), has successfully initiated operations at two new military bases, securing long-term contracts that stabilize earnings. In 2024, ASUS was awarded $56.5 million for capital upgrade projects across military bases, with completion expected by 2027 [3][4]. - Approved rate cases for regulated utilities provide a clear path for revenue and earnings growth, with projected investments of nearly $573.1 million in infrastructure from 2025 to 2027 [5][9]. Group 2: Risks and Challenges - Groundwater contamination remains a significant risk for water service providers, potentially leading to additional costs for AWR in the future [6]. - AWR's financial performance is heavily dependent on California, particularly Southern California, exposing it to various risks including political, water supply, labor, utility costs, and regulatory challenges [7]. Group 3: Market Performance - Over the past month, AWR shares have decreased by 3.4%, contrasting with a 0.1% growth in the industry [8].

Group 1 - Primerica, Inc. (PRI) and American States Water Company (AWR) are both classified as dividend-growth stocks, with AWR having a significantly longer history in this category [1] - AWR is recognized as a "dividend king," indicating a strong track record of increasing dividends over time, while PRI has not yet achieved this status [1] - The focus on high-quality and reliable dividend growth investments aims to provide stability and long-term wealth creation for investors [1] Group 2 - The service mentioned offers ideas for writing options to further enhance investors' income [1]

Company Overview - American States Water Company (NYSE: AWR) is a regulated utility operating in California, providing water and electricity services, as well as contracted water and wastewater services to military bases across the United States [1]. Financial Performance - The company offers a dividend yield of nearly 2.7%, which is noted as the highest among its peers [1]. Investment Strategy - The focus is on dividend growth investing with a long-term perspective, emphasizing the compounding benefits of sustainable dividend growth and capital appreciation potential [1].

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q2 2025 were $0.87, an increase from $0.85 in Q2 2024, reflecting a positive quarter overall [10] - Year-to-date EPS as of June 30 was $1.57, up $0.10 from $1.47 in the same period last year [14] - Consolidated revenues for Q2 increased by $7.7 million compared to Q2 2024 [11] Business Line Data and Key Metrics Changes - Water utility earnings increased to $0.73 per share from $0.67 per share, primarily due to new water rates effective January 1, 2025 [10] - Electric segment earnings rose to $0.03 per share from $0.01 per share, attributed to new electric rates [11] - ASUS earnings decreased to $0.13 per share from $0.19 per share, mainly due to lower construction activity [25] Market Data and Key Metrics Changes - Revenues for the water segment increased by $9.3 million due to new water rates [12] - Revenues for the electric segment rose by $4.2 million, also due to new rates [12] - Revenues from ASUS decreased by $5.8 million due to lower construction activities [12] Company Strategy and Development Direction - The company plans to invest $170 million to $210 million in infrastructure this year, reflecting a commitment to long-term growth [9] - The company is preparing to file its next electric rate case in early 2026 and a water rate case in July 2026 [18] - The company is supporting Senate Bill 473, which aims to make revenue decoupling mandatory for regulated water utilities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the decoupling legislation, highlighting strong arguments for its necessity [30] - The company anticipates robust growth in its rate base due to recent general rate case decisions [23] - Management remains confident in ASUS's ability to compete for new military-based contract awards despite recent declines in construction activity [25] Other Important Information - The board approved an 8.3% increase in the annualized dividend rate, reflecting confidence in sustainable earnings growth [7] - The company has paid dividends every year since 1931, with a 71-year consecutive increase [8] - Standard and Poor's affirmed a stable credit rating for the company, indicating strong financial health [17] Q&A Session Summary Question: Construction activity pacing towards the third quarter - Management expects to see more construction activity in the fourth quarter than in the third, but it remains dependent on permitting processes [28] Question: Confidence level regarding decoupling legislation - Management is cautiously optimistic about the decoupling legislation, noting strong arguments for its necessity and the benefits it could bring [30]

Core Insights - American States Water Company reported a consolidated earnings per share (EPS) of $0.87 for Q2 2025, an increase of $0.02 compared to Q2 2024 [2][26] - The company announced an 8.3% increase in the annualized dividend rate, marking 71 consecutive years of annual increases [4][10] Financial Performance - Water segment earnings per share for Golden State Water were $0.73 in Q2 2025, up $0.06 from Q2 2024, driven by new water rates and higher gains on retirement plan investments [3][26] - Electric segment earnings per share increased to $0.03 in Q2 2025, a $0.02 increase compared to Q2 2024 due to new rate approvals [3][27] - Consolidated revenues increased by $7.7 million in Q2 2025 compared to Q2 2024, with water revenues rising by $9.3 million and electric revenues increasing by $4.2 million [5][29] Capital Investments and Liquidity - The company expects capital infrastructure investments between $170 million and $210 million for the year [6][24] - Operating cash flow for the first six months of 2025 was $109.6 million, a $39.1 million increase over the same period in 2024 [7][32] - The borrowing capacity was expanded from $165 million to $195 million, with maturity extended to June 2029 [6][34] Regulatory Developments - The California Public Utilities Commission (CPUC) approved new water and electric rates for 2025 to 2027 and 2023 to 2026, respectively [20][35] - A modified rate adjustment mechanism (MRAM) was adopted, replacing the full decoupling mechanism, which may introduce future revenue volatility [36][37] - Senate Bill 473, if passed, could restore mandatory revenue decoupling for California water utilities [11][39] Growth and Future Outlook - Golden State Water's rate base grew from $752.2 million in 2018 to $1.3575 billion in 2024, representing a 10.3% compound annual growth rate [8][43] - The company completed the acquisition of water and wastewater system assets for a new community, expected to have approximately 1,300 customer connections [10][42] - ASUS is projected to contribute $0.59 to $0.63 per share in 2025, with expectations of recovery in the second half of the year as construction activity normalizes [9][47]

Financial Performance - Consolidated diluted earnings per share increased by $0.02 to $0.87 in Q2 2025, compared to $0.85 in Q2 2024 [12, 13] - Year-to-date consolidated diluted earnings per share increased by $0.10 to $1.57 in 2025, compared to $1.47 in 2024 [12, 19] - Total operating revenues increased to $163 million in Q2 2025, compared to $155.3 million in Q2 2024, a $7.7 million increase [14] Segment Performance - Water segment diluted EPS increased by $0.06 to $0.73 in Q2 2025, compared to $0.67 in Q2 2024 [13] - Electric segment diluted EPS increased by $0.02 to $0.03 in Q2 2025, compared to $0.01 in Q2 2024 [13] - Contracted Services diluted EPS decreased by $0.06 to $0.13 in Q2 2025, compared to $0.19 in Q2 2024 [13, 34] Regulatory and Capital Investment - GSWC is authorized to invest $573.1 million in capital infrastructure over a three-year capital cycle [23, 28] - BVES is authorized to invest $75.6 million in capital infrastructure over a four-year rate cycle [24] - Capital expenditures for 2025 are expected to be in the range of $170-$210 million [12, 20] Dividends and Liquidity - The Board of Directors approved an 8.3% increase in the third quarter cash dividend for 2025, from $0.4655 to $0.5040 per share [12, 37] - Operating cash flows were $109.6 million year-to-date in 2025, compared to $70.5 million year-to-date in 2024 [20]

Core Insights - American States Water Company (AWR) reported second-quarter 2025 operating earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents by 5.4% and up from 85 cents in the same quarter last year [1][9] AWR's Total Revenues - Total operating revenues reached $163.1 million, falling short of the Zacks Consensus Estimate of $169 million by 3.5%, but increased by 5% from $155.3 million in the prior-year period [2][9] Highlights of AWR's Q2 Release - Operating expenses were $112.1 million, an increase of 8.2% from $103.6 million in the year-ago quarter, driven by higher water purchases, administrative costs, depreciation, and maintenance expenses [3] - Operating income was $51 million, down 1.3% from $51.7 million in the corresponding period of 2024 [3] Interest and Income - Interest expenses totaled $12.1 million, a decrease of 7.6% year over year, while interest income was $1.5 million compared to $2.1 million in the previous year [4] AWR's Segmental Details - Water segment earnings were 73 cents per share, up 9% from 67 cents a year ago, attributed to new rate increases authorized by the CPUC effective January 1, 2025 [5] - Electric segment EPS was 3 cents, an increase of 2 cents from the year-ago quarter, due to revenue increases from new rates implemented in 2025 [6] - Contracted Services segment EPS was 13 cents, down from 19 cents in the year-ago quarter, while AWR (Parent) reported a loss of 1 cent per share compared to a loss of 2 cents previously [7] AWR's Financial Update - As of June 30, 2025, cash and cash equivalents were $20.2 million, down from $26.7 million as of December 31, 2024 [8] - Long-term debt increased to $789.5 million from $640.4 million as of December 31, 2024 [8] Cash Flow - Cash provided by operating activities in the first half of 2025 totaled $109.6 million, compared to $70.5 million in the same period last year [10]

Company Performance - American States Water (AWR) reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.92 per share, but showing an increase from $0.85 per share a year ago, resulting in an earnings surprise of -5.43% [1] - The company posted revenues of $163.07 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3.51%, compared to year-ago revenues of $155.33 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and has topped consensus revenue estimates three times [2] Stock Performance - American States Water shares have lost about 4% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.03 on $176 million in revenues, and for the current fiscal year, it is $3.29 on $646 million in revenues [7] - The outlook for the industry can significantly impact the stock's performance, with the Utility - Water Supply industry currently in the top 41% of Zacks industries [8]