Here's Why AWR Stock Deserves a Place in Your Portfolio Right Now

American States Water AWR continues to benefit from a growing water and electric utility customer base, which is driving higher demand for its services. Its diversified business model, spanning water, electricity, and long-term military contracts, supports stable and consistent financial performance.Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.AWR’s Growth Outlook & Surprise HistoryThe Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased 1.22% to $3.32 in the past 60 days. The Zacks Consensus Estimate for 2025 revenues is pegged at $629 million, which indicates growth of 5.63% from the 2024 reported figure.AWR’s long-term (three to five years) earnings growth rate is 5.65%.AWR’s earnings beat estimates in three of the trailing four quarters and missed the same in one, resulting in an average surprise of 3.63%.AWR’s Return to ShareholdersAmerican States Water has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is 50.5 cents per share, resulting in an annualized dividend of $2.02. AWR’s current dividend yield is 2.73%, better than the Zacks S&P 500 composite's average of 1.41%.AWR’s Investment Plans and Drop in Interest RatesAWR plans to invest $573.1 million during 2025-2027 to strengthen infrastructure and existing operations. For 2025, the company plans capital expenditure of $180-$210 million, primarily focused on upgrading water infrastructure.The ongoing decline in interest rates will benefit the company. The U.S. Federal Reserve has gradually lowered the benchmark rate by 175 basis points to a range of 3.50-3.75%. The Federal Reserve is expected to cut interest rates further in 2026. As a result, American States Water’s cost of capital should decline, which would help boost its margins.AWR’s Debt StructureCurrently, AWR’s total debt to capital is 47.54%, better than the Zacks Utility -Water Supply  industry’s average of 50.46%.AWR’s times interest earned ratio (TIE) at the end of the third quarter of 2025 was 4.5. The TIE ratio, being greater than one, suggests that the company will be able to make its interest payment obligations in the near term without difficulty.AWR Stock Price PerformanceOver the past six months, AWR’s shares have lost 5% compared to the industry’s growth of 3%.Other Stocks to ConsiderA few other top-ranked stocks from the same industry are Ameren AEE, NextEra Energy, Inc. NEE and Dominion Energy, Inc. D, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.AEE’s long-term earnings growth rate is 8.52%. The Zacks Consensus Estimate for 2025 EPS is pegged at $5.01, which implies year-over-year growth of 8.21%.NEE’s long-term earnings growth rate is 8.08%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.69, which implies a year-over-year rise of 7.58%.D’s long-term earnings growth rate is 10.26%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.40, which suggests year-over-year growth of 22.74%. Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ameren Corporation (AEE): Free Stock Analysis Report NextEra Energy, Inc. (NEE): Free Stock Analysis Report Dominion Energy Inc. (D): Free Stock Analysis Report American States Water Company (AWR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks