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American States Water to Grow on Rate Hike & Long-Term Deals

We recently issued an updated research report on American States Water Company AWR.

Estimates for American States Water have been revised upward over the past 60 days. Notably, the Zacks Consensus Estimate for the company’s 2018 and 2019 earnings has moved 0.6% and 3.1% north to $1.73 and $2 per share, respectively. Also, the company’s bottom line is likely to witness year-over-year growth of 1.2% and 15.9% in 2018 and 2019, respectively.

What’s Driving the Stock?

American States Water Company has a sturdy utility customer base and most importantly, it is increasing its water customer base at a slow but steady pace.  The new water rate approval in January 2018 will expand the current-year water gross margin by $4.5 million from the year-ago level. Also, the company has filed for water rate hike of $125-$12 million electric rate hike to recoup the expenditure already incurred to strengthen its existing water and electric facilities.

American States Water Company Price and Consensus

A major portion of American States Water Company’s total revenues comes from its Water segment and it is quite essential for a water service provider to have ample water right. As of Dec 31, 2017, the company had adjudicated groundwater rights and surface water rights of 73,611 and 11,335-acre feet per year, respectively.

American States Water’s subsidiary, American States Utility Services (ASUS), has long-term contracts with 11 military bases after it received another long-term service contract from Fort Riley, KS in September. ASUS is expected to deliver in the range of 38-42 cents during 2018 and 43-47 cents per share in 2019.

The ongoing investments in strengthening and expanding its existing infrastructure is enabling the company to serve its expanding customer base more effectively, ultimately boosting its performance.

Zacks Rank & Other Key Picks

American States Water currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks from the same industry are as follows:

Middlesex Water Company MSEX sports a Zacks Rank #1. The stock has seen the Zacks Consensus Estimate for 2018 earnings move 6.5% north over the past 60 days to $1.96.

American Water Works Company, Inc. AWK is a Zacks #2 Ranked player. The stock has seen the consensus estimate for 2018 earnings being revised 0.3% upward over the past 60 days to $3.30.

Consolidated Water Co. Ltd. CWCO carries a Zacks Rank of 2. The stock has seen the consensus mark for 2018 bottom line being raised 29.8% over the past 60 days to 74 cents.

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American States Water Company (AWR): Free Stock Analysis Report
 
Middlesex Water Company (MSEX): Free Stock Analysis Report
 
Consolidated Water Co. Ltd. (CWCO): Free Stock Analysis Report
 
American Water Works Company, Inc. (AWK): Free Stock Analysis Report
 
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