American States Water Company raises dividend by 8.2%, marks 72nd year

American States Water Company (NYSE: AWR) recently announced an 8.2% increase in its quarterly dividend, raising it from $0.5040 to $0.5455 per share. This change was approved by the company's board on July 28, 2026, marking another significant milestone in its long history of dividend payments.

The timing of this announcement highlights AWR's commitment to rewarding its shareholders amid a challenging economic environment. While larger utility companies often dominate headlines, American States Water Company has quietly built a robust reputation for consistent dividend increases. The company has paid dividends every year since 1931 and boasts an impressive track record of raising them for 72 consecutive years. AWR’s dividend growth has averaged 8.4% annually over the past five years, and management aims for long-term growth of over 7% per year.

Currently, AWR's forward dividend yield stands at approximately 2.49%, which may not attract investors seeking immediate high returns. However, the potential for substantial growth in dividends could appeal to those looking for long-term income. If the company maintains its recent growth rate, the annual payout could reach around $3.20 in five years, making it a compelling choice for income-focused investors who prioritize future growth over initial yield.

Despite its solid dividend history, investors should approach AWR's valuation with caution. The stock trades at a forward price-to-earnings (P/E) ratio of 23.2, which is higher than many of its utility peers. While this premium may reflect the company's stable earnings from regulated water and electric operations, potential investors need to weigh the risks against the expected returns carefully. AWR's earnings per share rose 8.6% year over year in the first quarter of 2026, indicating a healthy financial outlook. However, with a payout ratio of approximately 58%, the company must balance rewarding shareholders with maintaining revenue growth.