American States Water Co (AWR) stock analysis

P/E below its 5-year median

American States Water's P/E of 24.3 is below its own 5-year median of 25.2.

P/E above the industry

American States Water's P/E of 24.3 is above the Water Supply median of 22.7.

EV/EBITDA below its 5-year median

American States Water's EV/EBITDA of 15.5 is below its 5-year median of 15.9.

P/B above the industry

American States Water's price-to-book of 3.14 is above the Water Supply median of 1.80.

Trading above fair value

The share price of $88.80 is above our fair value estimate of $80.26.

Margin of safety under 20%

The price is 10.6% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 10.2% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 16.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 14.7% over the last twelve months, against a 5-year average of 8.6% a year.

Growing faster than the industry

Revenue grew 13.2% over the last twelve months; the Water Supply median is 5.9%.

Guidance lowered

American States Water lowered its 2026 invest outlook on Aug 5, 2026.

Gross margin slipping

Gross margin was 90.1% over the last twelve months, against 92.1% a year earlier.

Return on equity under 15%

Return on equity was 13.7% over the last twelve months and averaged 13.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

American States Water's return on equity of 13.7% is above the Water Supply median of 9.2%.

Earnings grew over 5 years

Net income grew 8.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 20.5% over the last twelve months, against a 5-year average of 19.1%.

Net margin above the industry

American States Water's net margin of 20.5% is above the Water Supply median of 20.1%.

High debt

Debt is 64.0% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 68.7% five years ago to 64.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 33.0% of total debt.

Interest not well covered

Operating income covers interest expense 4.7 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.98 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.12; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

American States Water paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; American States Water yields 2.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 54.8% of net income.

Not covered by free cash flow

Dividends take 378% of free cash flow.