AMERICAN STATES WATER CO (AWR) Stock Analysis
AMERICAN STATES WATER CO
▾ What's in the 49/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend, DCF applicability). It excludes the the Altman Z score, whose retained-earnings input this filer does not report separately, which relies on a proxied (estimated) input. See the Financial Health section for the full balance-sheet read.
How to read AWR (regulated utility)
A regulator sets what a utility can earn, so its value tracks book value, dividend yield and payout — not a free-market DCF.
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Utility lens (P/B, yield, payout) ↓
These are the metrics utility-fund managers actually use.
Is now a good time to buy AWR?
Macro: Neutral / mid-cycleAWR trades at $88.97 vs an estimated intrinsic value of $58.50 — a +52.1% premium to model IV.
Not investment advice. The model can be wrong. Verify the assumptions in the sections below and consider consulting a licensed advisor for significant decisions.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: industry similar to Utilities. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
How does AWR stack up against its closest peers?
We take the 4 same-industry companies most similar to AWR (similar size) and check what investors are paying for each dollar of their revenue (or profits). If AWR is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 4 same-industry peers; implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
▾ View peer list (8)
| Ticker | Company | Industry | Mcap | EV/Sales | EV/GP | EV/EBIT | FCF Yield |
|---|---|---|---|---|---|---|---|
| SBS | COMPANHIA DE SANEAMENTO BASICO DO | Water Utilities | $3.9B | — | — | — | 3.0% |
| CWT | CALIFORNIA WATER SERVICE GROUP | Water Utilities | $2.7B | 4.3x | — | 24.5x | 2.7% |
| HTO | H2O AMERICA | Water Utilities | $2.4B | 5.4x | — | 24.3x | 2.9% |
| CDZIP | CADIZ INC | Water Utilities | $1.9B | 120.7x | — | — | 0.3% |
| OTTR | Otter Tail Corp | Electric Utilities ·fallback | $3.6B | 3.5x | — | 13.3x | 2.4% |
| USAC | USA Compression Partners, LP | Gas Utilities ·fallback | $4.0B | 6.5x | — | 21.3x | 3.0% |
| KNTK | Kinetik Holdings Inc. | Gas Utilities ·fallback | $2.9B | 1.7x | — | 18.5x | 6.7% |
| TAC | TRANSALTA CORP | Electric Utilities ·fallback | $4.2B | — | — | — | 3.0% |
Regulated rate-base economics
Regulated utilities earn a state-approved "allowed ROE" (typically 9-10%) on their regulated rate base. The business is engineered for stability — DCF can't price that properly because earnings are administratively set, not free-market. The right metrics are P/B, dividend yield, and payout ratio — what most utility-fund managers actually look at.
Note: For utilities, ROE comfortably above the regulator's allowed ROE (~9-10%) is the sign of operational efficiency. Big premium to book (>2×) generally requires accelerating rate-base growth — common drivers: grid modernization, renewables transition, or population/load growth in service area.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
Regulated utilities carry high leverage backed by long-life assets and regulator-set rate-base returns — Altman Z flags both as distress signals even when the business is stable. See the Utility Lens above for the metrics that matter (P/B, dividend yield, payout ratio).
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
Piotroski F's checks (operating cash flow, gross-margin trend, current ratio, asset turnover) assume an industrial cost structure, so they misread asset-heavy or financial businesses like this one — a healthy REIT, utility, pipeline, BDC/fund or holding company can score low for reasons that aren't weakness. See the sector lens above for the metrics that actually matter.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 7.0%, the figure our model used for AWR. Open Advanced to also change beta, growth and the rate path.
Note: at default inputs this calculator mirrors the headline model's three-scenario weighting (conservative/base/optimistic, 40/35/25), so its opening value should land close to the headline intrinsic value of $58.50. A small gap is rounding; a large one would be a data problem — and we check for it below.
6.5% — beta-based (CAPM), from this stock's BetaBeta — How much the stock moves when the overall market moves. 1.0 = moves with the market; 1.5 = moves 50% more than the market.
Why it matters: Higher beta = more volatile = should demand higher discount rate. Low beta stocks (utilities, consumer staples) move less.
Reference: Most stocks 0.5–1.5 · Defensives ~0.3 · High-vol tech ~1.5–2.0
Full explanation → of 0.35. The safe Treasury rate plus a premium scaled by how much more (or less) volatile the stock is than the market.
7.0% — sector/quality tier. A simpler hurdle set by industry and business durability: lower for stable, wide-moat companies; higher for speculative or micro-caps.
The headline value and this calculator start at 7.0% — the more conservative sector/quality rate (we use the more conservative sector/quality rate when model applicability is limited or the balance sheet is stretched). Drag the slider to the other rate to see the full range.
A full intrinsic value isn't shown for AWR because it's valued with a dividend-discount model this quick calculator doesn't replicate — see our published value above and the sector lens for the right metrics.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
AWR is deeply overvalued by our model, with the price 48% ABOVE intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation → (a 48% premium). The market is paying up for its consistent profitability and positive operating cash flow, typical for a regulated utility. The biggest risk to our model's base assumptions is that long-term debt continues its rising trend, which could strain future cash flows and dividend sustainability.
As of 25 days ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → per share.
- Regulatory decisions on rate increases
- Trends in long-term debt and interest expense
- Operating cash flow trends in future quarters
The trend, in plain numbers (2024 → 2025)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +8% to $136.7M.
- Free cash flow is negative at -$10.7M — the cash burn narrowed vs last year.
- Net income grew +9% to $130.4M.
Nothing clearly worsening year-over-year.
Management & Leadership
Eva Tang is the current President and CEO of American States Water Co., having assumed the role in 2023. She previously served as Chief Financial Officer, bringing extensive experience in utility finance and operations to her leadership position.
What They Make
American States Water Co. provides water and wastewater services to residential, commercial, industrial, and governmental customers, primarily in California. They also provide contracted water and wastewater services to military bases across the United States.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
The market prices AWR at a premium of +48% to our model, likely due to its stable utility business model, consistent profitability (net income positive latest, 5/5 yrs), and positive operating cash flow (positive 5/5 yrs). Investors typically value regulated utilities for their predictable revenue streams and dividend income, despite the long-term debt rising from $412M to $783M.
Three Scenarios, Weighted
| Scenario | IV | vs Price | Weight |
|---|---|---|---|
| Conservative | $49.71 | -44.1% | 40% |
| Base | $59.53 | -33.1% | 35% |
| Optimistic | $71.11 | -20.1% | 25% |
| Weighted | $58.50 | -34.2% | 100% |
Business Model & Valuation
How They Make Money
The company pays a dividend of $1.93 per share annually, derived from its cash flow statement, consistent with its dividend compounder maturity.
Dividend Discount Medium
Utility (Water Utilities): dividend discount model - growth is regulated and yield is the primary driver.
Show advanced inputs
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project rate-base growth, allowed ROE and dividend growth independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 4.8% per year over the last four years, from $113M to $137M.
Geography & Markets
American States Water Co. primarily operates its regulated utility businesses in California. Additionally, it provides contracted water and wastewater services to various military bases across the United States, though specific geographic segment percentages are not available.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)63.5NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (2 notes — click to expand/collapse)
Guardrail Notes (2)
- Dividend derived from cash-flow statement ($1.93/yr; SEC has no per-share dividend feed).
- Dividend data sparse; DDM using estimated yield. Confidence reduced.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From AMERICAN STATES WATER CO's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 136.7M | 130.4M | $3.37 |
| 2024 | 126.4M | 119.3M | $3.17 |
| 2023 | 120.4M | 124.9M | $3.36 |
| 2022 | 110.9M | 78.4M | $2.11 |
| 2021 | 113.4M | 94.3M | $2.55 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 229.7M | 236.8M | 3.6M | -10.7M |
| 2024 | 198.7M | 232.0M | 3.7M | -37.0M |
| 2023 | 67.7M | 188.5M | 3.3M | -124.2M |
| 2022 | 117.8M | 166.2M | 2.6M | -51.0M |
| 2021 | 115.6M | 144.5M | 2.6M | -31.5M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 229.7M − 236.8M − 3.6M (stock-based comp) = -10.7M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a TTM dividend, not this single year.
Balance Sheet
| Total Assets | 2.7B |
| Total Liabilities | 1.7B |
| Equity | 1.0B |
| Total Debt | 790.9M |
Similar companies worth a look
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