HomeMost PopularInvestingWhy You Should Consider Adding American States Water (AWR) to Your Investment...

Why You Should Consider Adding American States Water (AWR) to Your Investment Portfolio

Actionable Trade Ideas

always free

American States Water Co. (AWR) is a leading utility company that offers water, wastewater, and electricity services in the United States. In this article, we will discuss four compelling reasons why adding AWR to your investment portfolio could be a smart decision.

1. Impressive Growth Projections

Analysts project that AWR’s earnings per share (EPS) for 2023 will reach $2.96, which represents a slight increase of 0.4% over the past 60 days. Furthermore, the consensus estimate for current-year sales indicates a year-over-year growth of 16.9%, with the company’s long-term earnings growth projected at 6.3%.

2. Strong Return on Equity (ROE)

A high ROE indicates a company’s efficient use of funds to generate higher returns. AWR currently boasts an ROE of 13.1%, surpassing the industry average of 10.3%. This suggests that the company is utilizing its resources more effectively compared to its competitors.

3. Solid Liquidity Position

American States Water has a strong current ratio of 1.20, outperforming the industry average of 0.93. This demonstrates the company’s financial capability to meet its short-term debt obligations effectively.

4. Consistent Dividend History

AWR has a track record of consistently paying dividends to its shareholders. In August 2023, the company raised its dividend, resulting in a quarterly payout of 43 cents and an annual payout of $1.72 per share. Remarkably, this marks the 349th consecutive dividend payment made by the company. With a current dividend yield of 1.99%, AWR offers a better return compared to the Zacks S&P 500 Composite’s yield of 1.67%.

Performance and Comparison

Over the past year, AWR’s stock has gained 3.3%, while the industry has experienced a 3.2% decline in stock value.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Investment Opportunities in the Industry

If you’re interested in exploring more investment options in the same industry, here are a few other top-ranked stocks:

  • American Water Works Co. Inc. (AWK)
  • The York Water Co. (YORW)
  • SJW Group (SJW)

All three stocks currently hold a Zacks Rank #2 (Buy).

Remember to conduct thorough research and consult with a financial advisor before making any investment decisions.

For more detailed analysis, you can download the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

If you’re interested in the semiconductor industry, we recommend checking out our top chip stock. This company has shown tremendous growth potential in emerging technologies like Artificial Intelligence, Machine Learning, and Internet of Things. With the global semiconductor manufacturing sector projected to reach $803 billion by 2028, there’s ample opportunity for significant returns. Find out more about this stock here.

Stay updated with the latest recommendations from Zacks Investment Research by downloading the free report on the 7 Best Stocks for the Next 30 Days. Click here to get your copy.


Disclaimer: The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.