American States Water Company (NYSE: NYSE:AWR) has increased its quarterly cash dividend, marking a continued trend of dividend growth for the utility company.
The Board of Directors has approved the rise of the third quarter dividend to $0.4655 per share, up from $0.4300. This adjustment boosts the annualized dividend rate to $1.862 per share, representing an 8.3% increase from the previous rate of $1.72 per share.
The company, with a history of consistent dividend payments dating back to 1931, has achieved a notable milestone with this being the 353rd consecutive dividend payment. It has also increased its dividend each calendar year for 70 years, joining a select group of New York Stock Exchange-listed companies with such a record.
Over the past five years, the quarterly dividend rate has grown at a compound annual growth rate (CAGR) of 8.8%, and the company is on track to maintain an 8.0% CAGR in dividend payments for the decade ending in 2024.
Robert J. Sprowls, President and CEO of American States Water Company, attributed the dividend increase to the Board's confidence in the company's financial strength and its commitment to long-term, sustainable earnings growth.
Sprowls pointed out the importance of a growing dividend in attracting capital for infrastructure investments, ensuring the provision of reliable services to customers, and delivering shareholder value.
Shareholders of record as of the close of business on August 16, 2024, will be eligible for the dividend, which is payable on September 3, 2024.
American States Water Company serves over one million people in ten states through its subsidiaries. It provides water service to about 264,400 customer connections in California and electricity to approximately 24,800 customer connections in San Bernardino County, California. Additionally, the company offers operations, maintenance, and construction management services for water and wastewater facilities on military bases across the country.
American States Water Company reported mixed results for Q1 2024. The company noted a decrease in diluted earnings per share compared to Q1 2023, but an increase in adjusted earnings per share. Significant developments include investments in regulated utilities and the commencement of water and wastewater operations at two new military bases.
Regulatory matters were also discussed, including rate cases and compliance with new PFAS drinking water regulations. Subsidiary Golden State Water saw an increase in its authorized return on equity and rate base at the start of 2024. Compliance with PFAS regulations is expected to lead to $80 million to $200 million in capital expenditures over the next five years.
InvestingPro Insights
American States Water Company (NYSE:AWR) continues to demonstrate its commitment to shareholder returns with its recent dividend increase, a testament to its financial resilience and strategic growth. The company boasts a robust track record of dividend growth, having raised its dividend for an impressive 31 consecutive years, as noted in one of the InvestingPro Tips.
InvestingPro Data reveals that AWR has a market capitalization of $3.07 billion and maintains a price-to-earnings (P/E) ratio of 27.37, reflecting a premium valuation relative to near-term earnings growth. The company's dividend yield stands at 2.08%, with a recent 8.18% growth in dividends, underscoring its appeal to income-focused investors. Additionally, AWR's gross profit margin for the last twelve months as of Q1 2024 is a solid 59.81%, indicating a strong ability to translate revenues into profits.
Moreover, American States Water Company has been profitable over the last twelve months and analysts predict the company will remain profitable this year, which could be a reassuring sign for investors considering the company's long-term earnings potential. For those interested in further in-depth analysis, there are additional InvestingPro Tips available on https://www.investing.com/pro/AWR, providing subscribers with a comprehensive look at the company's financial health and investment potential.
With these metrics in mind, American States Water Company's recent dividend increase aligns with its historical performance and suggests a confident outlook by the management on the company's financial position and future prospects.
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