Water Utility Stock #1: American States Water
American States Water (AWR) provides water service to one of 36 Californians throughout the northern, coastal and southern regions of the state.
In their recent earnings report, AWR showed an 11.1% increase in diluted earnings per share, but revenues fell short of analyst estimates by 2% due to an increase in the effective income tax rate for the company’s water segment.
I wouldn’t be too worried about this decrease, though. The fundamental need for a water utility company like AWR hasn’t changed, and isn’t likely to when its customer base in California is going to be in dire need of AWR’s services during the anticipated drought.
The company boasts regular annual dividend boosts since 1954, with ample room for more. And at a p/e ratio just north of 19x earnings, it actually trades at a lower multiple of estimated earnings than many other water utilities.
Dividend Yield: 2.7%.