8 Best Water Stocks To Invest In

06. American States Water Company (NYSE:AWR)

Number of Hedge Fund Holders: 20

American States Water Company (NYSE:AWR) is a notable player in the water sector, primarily due to its significant operations in providing water utility services through its subsidiary, Golden State Water. This focus on water services, combined with consistent performance metrics, positions it as one of the best water stocks to consider for investment.

As of the second quarter of 2024, American States Water Company (NYSE:AWR) reported a decline in consolidated earnings, with earnings per share (EPS) recorded at $0.85, compared to $1.04 for the same quarter last year. However, the adjusted earnings remained steady, reflecting resilience amid challenging conditions. This quarter’s performance was influenced by elevated operating expenses and increased interest costs, as well as favorable regulatory adjustments last year that are not expected to recur. Despite these challenges, revenue from the regulated water segment showed an increase due to recent rate hikes, indicating a positive trajectory for future earnings.

The company’s commitment to infrastructure investment is a crucial factor in its bullish outlook. With an authorized capital investment of approximately $573.1 million over the next three years, American States Water Company (NYSE:AWR) is well-positioned to enhance its service delivery capabilities. This investment not only ensures compliance with regulatory standards but also contributes to the reliability and safety of its water supply.

Additionally, the company recently approved a significant dividend increase, boosting its quarterly cash dividend to $0.46551 per share, reflecting an annualized rate of $1.86. This represents an 8.3% increase from the prior year, emphasizing the company’s ability to generate sustainable earnings growth. The consistent payment and increase of dividends over 70 consecutive years showcase its commitment to returning value to shareholders.

Furthermore, the number of hedge fund holders in American States Water Company (NYSE:AWR) has risen to 20 as of Q2 2024, compared to 19 in the previous quarter. This increase in institutional interest underscores growing confidence among investors.

In conclusion, American States Water Company (NYSE:AWR) presents a compelling investment opportunity, characterized by a strong commitment to infrastructure development, reliable revenue growth from regulatory adjustments, and a history of consistent dividend increases. The fundamentals support a bullish thesis for this water stock, making it a worthy consideration for investors looking to capitalize on the growing demand for water utilities.