Can AWR Continue Raising Dividends for Long-Term Shareholders?

American States Water Company AWR continues to reward shareholders through regular dividend payments and consistent annual dividend increases. Its long-standing dividend record reflects the strength of its regulated utility operations, resilient cash-flow generation and commitment to delivering sustainable shareholder returns.

In July 2026, the company’s board approved an 8.2% increase in the quarterly dividend, raising it to 54.55 cents per share from 50.40 cents, resulting in an annualized dividend of $2.18 per share. This marked the company’s 72nd consecutive year of annual dividend growth. AWR’s dividend policy targets a long-term CAGR of more than 7%, while its quarterly dividend has witnessed an 8.4% CAGR over the past five years. 

Current dividend payments do not guarantee that future payouts will grow at the same pace. However, the company’s financial performance and long-term strategy can provide insight into its ability to sustain shareholder-friendly initiatives.

American States Water benefits from a growing customer base and favorable rate increases, while its contracted services business gains from higher construction activity. Strategic investments in infrastructure upgrades and replacements enhance system reliability and support long-term growth. Stronger earnings performance further strengthens the company’s financial capacity to support shareholder distributions.

Operating cash flow increased to $116.6 million in the first half of 2026 from $109.6 million a year earlier. The stronger cash generation provides additional internal resources to support dividend payments and ongoing business needs.

Overall, AWR’s strong cash generation, regulated growth opportunities and consistent dividend policy are expected to support continued dividend growth over the long term.

Water Utilities’ Long History of Dividend Payments

Water utilities have a long history of providing shareholders with regular and steadily increasing dividends. Their essential services and regulated operations can provide relatively stable cash flows, supporting long-term dividend payments and making them attractive to income-focused investors.

California Water Service Group CWT has consistently rewarded shareholders through regular dividends, increasing its annual dividend for 59 consecutive years. Its quarterly dividend stands at 33.50 cents, implying an annualized dividend of $1.34 per share. 

Middlesex Water Company MSEX has rewarded shareholders with consistent dividend payments for more than 100 years. The company’s board has approved a quarterly dividend of 36 cents per share, translating to an annualized dividend of $1.44 per share.

The Zacks Rundown on AWR

AWR’s Earnings Estimates

The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year increase of 9.20% and 3.26%, respectively.

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Debt to Capital

AWR's debt-to-capital ratio currently stands at 44.79%, lower than the water supply industry’s 54.63%.

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AWR’s Stock Price Performance

In the past three months, American States Water’s shares have risen 17.3% compared with the industry’s 2.4% growth.

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AWR’s Zacks Rank

AWR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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