American States Water Company

AI-generated fair value estimate for this company.

Method: Two-stage dividend discount model (not a standard FCF DCF, since AWR's free cash flow is volatile/near-zero from continuous water-and-electric-utility capex): $2.182 current annualized dividend per share (Q3 2026 rate of $0.5455/quarter); 7.5% annual dividend growth years 1-10 (in line with management's long-term policy of 'more than 7%' dividend CAGR and its recent 8.4-8.7% actual run rate); terminal dividend growth of 4% thereafter; 8.0% cost of equity; 39.64 million shares outstanding.

Reasoning: American States Water is a regulated water/electric utility holding company (72 consecutive years of dividend increases) whose value is best captured through a dividend discount model tied to its own long-term dividend growth policy rather than raw free cash flow, which swings between positive and negative due to heavy, lumpy infrastructure investment.