American States Water Co. Overcomes Drought Challenges Despite Delays

The ongoing drought in California has been a challenge for American States Water Co., a San Dimas-based water utility holding company. Its subsidiary, Golden State Water, has had to pay more for imported water due to the drought, and a year-long delay in Golden State Water’s rate case before the California Public Utilities Commission has deprived the company of roughly $30 million in additional revenue it had planned for this year. Despite these challenges, investors have been bullish on American States Water stock, driving the share price up 28% to $99.47 on Nov. 25.

One key factor that has been driving investors’ bullish sentiment for American States Water is its relatively clean balance sheet, with a total-debt-to-total-assets ratio of 0.35 for the third quarter. In addition, investors are optimistic that the Public Utilities Commission will stick to a preliminary settlement agreement it reached with Golden State Water in late 2021 that would allow the utility to collect an additional $30 million in 2022 revenue.

American States Water also stands out as a so-called dividend king, having increased quarterly dividend payouts every year for 68 consecutive years. That’s the longest streak of any publicly traded company in the nation.

In order to monitor the performance of the drought supply chain, American States Water is using data analytics and machine learning to track customer usage of water and identify any potential issues. This allows the company to rapidly respond to any potential issues, ensuring that the supply chain remains efficient and reliable.