American States Water (NYSE:AWR): 57 consecutive years of dividend increases

 

American States Water has evolved significantly since 1929 when the company acquired its first water systems. Today, AWR is a water-focused service provider. needs of more than a million people across California and ArizonaIn 1998, American States Water Company became the parent company of a new subsidiary dedicated to the unregulated water industry, American States Utility Services Inc.

AWR provides water to 1 in 36 Californians in 75 communities across 10 counties. The company also distributes electricity to approximately 23,250 customers through Bear Valley Electric Services. Through its subsidiary, American States Utility Services Inc., the company provides services to municipalities, the U.S. government and private entities, including billing, meter reading, water marketing and operations, and maintenance of water and wastewater systems at various military installations throughout the United States.

THE long term average return is interesting, at 3.05%, but the PER is quite high, with 16.20, and above all the average annual progression of dividends is among the lowest of our portfolio, with 3.33%. This low rate is offset by 57 consecutive years of dividend increases, which is the record of our portfolio tied with PG. The distribution ratio is correct, at 51.80%, which leaves some room for the company to continue to increase its dividend even in the event of a difficult passage.

Volatility, at 12.35%, is slightly higher than our portfolio, but still well below the market. Beta, at 0.35, indicates that the stock is also relatively insensitive to market fluctuations. The chart below confirms AWR's independent and low volatility.

AWR does not offer any particular protection against fluctuations in the dollar: 

AWR could be suitable for a very risk-averse investor or rentier, looking for a regular performance and who is hedged against inflation risk. The price appreciation and the growth of distributions give it an additional argument compared to bonds. Even if the performance compared to the S&P is modest, the volatility and beta are in return really reasonable.

For our part, even if we often err on the side of caution, we are of the opinion this time that despite its undeniable defensive strength, the income that can be expected from AWR is not sufficient to justify a purchase. On the other hand, it is obviously a good stock to keep if you already have it in your portfolio.

Sources: wikipedia.org, wikinvest.com, yahoo.com, swissquote.ch, dividends.ch