American States Water Company Common Stock (AWR)

FairStock Score: 50/100 — MIXED

Key Financials

Strengths

• Solid return on equity of 13.3% above cost of capital
• Attractive 2.6% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($45) with negative 79% margin of safety—limited downside protection
• Altman Z-Score of 1.6 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

American States Water Company Common Stock is a small-cap utilities company valued at $3.2 billion. The business generates $658 million in annual revenue with a 6.3% net margin. From a quality standpoint, American shows distressed Altman Z-Score of 1.6 warrants caution and adequate 13% ROE. On valuation, the stock is reasonably priced at 24.0x earnings, with trades above its Graham Number with a negative 79% margin. Growth dynamics show revenue growing at 14.8% and profit growth of 1.1%. The 2.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 50/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the utilities space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer