American States Water’s AWR strategic investments in infrastructure upgrades will allow it to provide quality services to its expanding customer base. Given its growth opportunities, AWR makes for a solid investment option in the utility sector.

Let us focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment option at the moment.

Growth Projections of AWR

The Zacks Consensus Estimate for AWR’s 2025 earnings per share (EPS) indicates year-over-year growth of 10.71%.

AWR’s long-term (three-to-five years) earnings growth rate is 1.85%.

AWR’s Systematic Investments

Strategic capital investments are making AWR’s infrastructure stronger and more resilient. The company has plans to invest $573.1 million in the 2025-2027 period to further strengthen its operation.

AWR’s Solvency Ratio

The times interest earned ratio at the end of third-quarter 2024 was 3.9. The ratio, being greater than one, implies the company’s ability to meet future interest obligations without difficulties.

Dividend History of AWR

The company’s objective is to increase the dividend and witness a CAGR of more than 7% in the long term. Currently, American States Water’s quarterly dividend is 46.55 cents per share, up 8.3% from the previous quarter’s 43 cents. The new dividend resulted in an annualized dividend of $1.862 per share. The company’s current dividend yield is 2.52%, better than the Zacks S&P 500 composite’s 1.53%.

AWR’s Price Performance

In the past year, the stock has lost 2.1% compared with the industry’s 2.6% decline. The slackness in price offers a good opportunity to add the stock at low rates.

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Other Stocks to Consider

A few other top-ranked stocks from the same sector are Dominion Energy D, OGE Energy OGE and Atmos Energy ATO, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

D’s long-term earnings growth rate is 13.6%. The Zacks Consensus Estimate for 2025 EPS has increased 0.3% in the past 60 days.

OGE’s long-term earnings growth rate is 5.18%. The Zacks Consensus Estimate for 2025 EPS indicates year-over-year growth of 4.75%.

ATO’s long-term earnings growth rate is 7.01%. The Zacks Consensus Estimate for fiscal 2025 EPS has increased 0.3% in the past 60 days.

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OGE Energy Corporation (OGE) : Free Stock Analysis Report

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American States Water Company (AWR) : Free Stock Analysis Report

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