Core Viewpoint - American States Water (AWR) is focusing on infrastructure upgrades to ensure reliable services for its growing customer base, supported by long-term contracts with military bases, making it a solid investment in the Zacks Utility - Water Supply industry [1][3]. Growth Outlook - The Zacks Consensus Estimate for AWR's 2025 earnings per share (EPS) has increased by 1.22% to $3.32 over the past 60 days [3]. - The estimated revenue for 2025 is $629 million, indicating a growth of 5.63% from the 2024 reported figure [3]. - AWR's long-term earnings growth rate is projected at 5.65% [3]. - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 3.63% [3]. Return to Shareholders - AWR has been consistently increasing shareholder value through dividends, currently paying a quarterly dividend of $0.50 per share, leading to an annualized dividend of $2.02 [4]. - The current dividend yield stands at 2.68%, outperforming the Zacks S&P 500 composite average of 1.51% [4]. Infrastructure Investment - AWR is planning to invest $573.1 million from 2025 to 2027 to enhance its infrastructure and operations [6]. - New rate filings and subsequent increases are expected to help recover the investment costs and support ongoing infrastructure upgrades [6]. Debt Structure - AWR's total debt to capital ratio is 47.54%, which is better than the industry average of 60.90% [7]. - The times interest earned (TIE) ratio is 4.5, indicating the company can comfortably meet its interest payment obligations [7]. Stock Performance - Over the past month, AWR's shares have decreased by 0.3%, while the industry has seen a decline of 1.2% [8].

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].