Group 1: Market Overview - Tech stocks that had been driving the market rally are now weighing on Wall Street, with significant declines observed in major indices such as the Dow, S&P 500, and Nasdaq [1][4] - Concerns over high valuations and ongoing market volatility have led investors to shun riskier assets, particularly in the tech sector [1][6] Group 2: Defensive Investment Recommendations - In light of market volatility, it is advisable to invest in defensive stocks from the utilities sector, such as American States Water Company, Ameren Corporation, and Entergy Corporation, all of which carry a Zacks Rank 2 (Buy) [2] - The recommended approach is to focus on low-beta stocks with high dividend yields and favorable Zacks rankings [3] Group 3: Company Profiles - **American States Water Company (AWR)**: Provides fresh water, wastewater services, and electricity, with an expected earnings growth rate of 4.7% for the current year and a beta of 0.64, alongside a dividend yield of 2.73% [8][9] - **Ameren Corporation (AEE)**: Generates and distributes electricity and natural gas, serving nearly 2.4 million electric and over 900,000 natural gas customers, with an expected earnings growth rate of 7.8% and a beta of 0.50, offering a dividend yield of 2.70% [10][12] - **Entergy Corporation (ETR)**: Engaged in electric power production and retail distribution, with a generating capacity of 30,000 MW, an expected earnings growth rate of 6.9%, a beta of 0.63, and a dividend yield of 2.68% [13]

Core Viewpoint - American States Water (AWR) is focusing on infrastructure upgrades to ensure reliable services for its growing customer base, supported by long-term contracts with military bases, making it a solid investment in the Zacks Utility - Water Supply industry [1][3]. Growth Outlook - The Zacks Consensus Estimate for AWR's 2025 earnings per share (EPS) has increased by 1.22% to $3.32 over the past 60 days [3]. - The estimated revenue for 2025 is $629 million, indicating a growth of 5.63% from the 2024 reported figure [3]. - AWR's long-term earnings growth rate is projected at 5.65% [3]. - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 3.63% [3]. Return to Shareholders - AWR has been consistently increasing shareholder value through dividends, currently paying a quarterly dividend of $0.50 per share, leading to an annualized dividend of $2.02 [4]. - The current dividend yield stands at 2.68%, outperforming the Zacks S&P 500 composite average of 1.51% [4]. Infrastructure Investment - AWR is planning to invest $573.1 million from 2025 to 2027 to enhance its infrastructure and operations [6]. - New rate filings and subsequent increases are expected to help recover the investment costs and support ongoing infrastructure upgrades [6]. Debt Structure - AWR's total debt to capital ratio is 47.54%, which is better than the industry average of 60.90% [7]. - The times interest earned (TIE) ratio is 4.5, indicating the company can comfortably meet its interest payment obligations [7]. Stock Performance - Over the past month, AWR's shares have decreased by 0.3%, while the industry has seen a decline of 1.2% [8].

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A being the highest score [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3] - The Growth Score assesses a company's financial health and future outlook through earnings and sales projections [4] - The Momentum Score identifies stocks with favorable price trends and earnings outlooks [5] - The VGM Score combines all three Style Scores to highlight stocks with the best value, growth, and momentum [6] Zacks Rank and Style Scores Interaction - The Zacks Rank uses earnings estimate revisions to help investors build successful portfolios, with 1 (Strong Buy) stocks averaging a +23.93% annual return since 1988 [7] - There can be over 800 top-rated stocks at any time, making it essential to utilize Style Scores for selection [8] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks but high Style Scores may still face price declines [10] Company Spotlight: American States Water (AWR) - American States Water Company provides water, wastewater, and electricity services in the U.S. and holds a Zacks Rank of 2 (Buy) with a VGM Score of B [11] - AWR is projected to have a year-over-year earnings growth of 4.7% for the current fiscal year, making it attractive for growth investors [11] - Recent analyst revisions have increased the earnings estimate for fiscal 2025 by $0.04 to $3.32 per share, with an average earnings surprise of +3.6% [12]

Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, but identifying such stocks is challenging due to their inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system helps identify promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - American States Water (AWR) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable [3] - American States Water has a historical EPS growth rate of 7.3%, with a projected EPS growth of 4.7% this year, significantly outperforming the industry average of 1.2% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for growth stocks [5] - American States Water has an S/TA ratio of 0.25, indicating it generates $0.25 in sales for every dollar in assets, compared to the industry average of 0.15 [6] Group 4: Sales Growth - The company is also well-positioned for sales growth, with expected sales growth of 5.6% this year, surpassing the industry average of 3.7% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements [7] - American States Water has seen a 1.2% increase in current-year earnings estimates over the past month [7] Group 6: Overall Positioning - American States Water holds a Zacks Rank of 2 and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [9]

Core Viewpoint - The current market is considered expensive, with the Shiller CAPE ratio at 39.6, indicating a potential correction or bear market is likely approaching [1][2] Market Context - Historical data shows that corrections of 10% are common, with the S&P 500 experiencing an average annual correction of at least 10% since 1950, and a 20% correction occurring every three to five years on average [2] Defensive Investment Strategy - Defensive sectors such as healthcare, consumer staples, and utilities are expected to perform well during market corrections and bear markets [3] - Dividend stocks are highlighted as favorable investments during sideways and bear markets due to their income generation [3] Selected Stocks for Mini Portfolio - A mini portfolio of eight stocks, all classified as Dividend Kings (companies that have increased dividends for 50 consecutive years), is recommended for market drawdowns [4] - These stocks are positioned in defensive sectors and offer dividend yields above the S&P 500 index yield of 1.25% [4] Individual Stock Highlights - **Coca-Cola (KO)**: Dividend yield of 2.9%, increased dividends for 63 years, current price around $70.61, market cap $303 billion [5][6] - **Procter & Gamble (PG)**: Dividend yield of 2.86%, increased dividends for 69 years, current price around $147 [7] - **Johnson & Johnson (JNJ)**: Dividend yield of 2.7%, increased dividends for 62 years, current price around $186.57, market cap $450 billion [8][9] - **American States Water (AWR)**: Dividend yield of 2.54%, increased dividends for 71 years, current price around $74.84, market cap $3 billion [10][11] - **Northwest Natural Holding (NWN)**: Highest yield at 4.21%, increased dividends for 70 years, current price around $47 [12] - **Genuine Parts (GPC)**: Dividend yield of 3.3%, increased dividends for 69 years, current price around $127 [13] - **Marzetti Co. (MZTI)**: Dividend yield of 2.21%, increased dividends for 62 years, current price around $172 [13] - **Becton, Dickinson (BDX)**: Dividend yield of 2.35%, increased dividends for 53 years, current price around $178 [14] Total Investment Overview - The total cost to purchase one share of each of these eight stocks is approximately $1,000, creating a defensive income-generating portfolio [15]

Market Overview - Wall Street's major indexes have reached multiple all-time closing highs recently, but the market has experienced volatility due to economic uncertainties [1][5] - The tech sector, particularly driven by AI optimism, has seen fluctuations, with significant pullbacks in stock prices due to concerns over high valuations [2][6] Economic Concerns - Investors are worried about the health of the economy, particularly with a shrinking labor market and fewer jobs being added [7] - Layoffs surged in October, totaling 153,074, which is a 183% increase sequentially and a 175% increase year-over-year [8] - The ongoing government shutdown has limited access to fresh economic data, contributing to investor uncertainty [9] Defensive Investment Recommendations - In light of market volatility, it is advisable to consider defensive stocks, particularly from the utilities sector, which are characterized by low beta values and high dividend yields [3][4][12] - Five recommended low-beta utility stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth of 6%, beta of 0.73, and a dividend yield of 2.02% [10][11] - **American States Water Company (AWR)**: Expected earnings growth of 4.1%, beta of 0.64, and a dividend yield of 2.72% [13][14] - **Consolidated Water Co. Ltd. (CWCO)**: Expected earnings growth of 0.9%, beta of 0.51, and a dividend yield of 1.61% [15][16] - **Entergy Corporation (ETR)**: Expected earnings growth of 6.9%, beta of 0.63, and a dividend yield of 2.49% [17][18] - **Duke Energy Corporation (DUK)**: Expected earnings growth of 7.3%, beta of 0.45, and a dividend yield of 3.44% [18][19]

Financial Data and Key Metrics Changes - Recorded earnings per share (EPS) for Q3 2025 were $1.06, an increase of 11.6% compared to $0.95 in Q3 2024 [4][8] - Year-to-date EPS as of September 30 was $2.63, up $0.21 or 8.7% from $2.42 in the same period last year [5][12] - Consolidated revenue for Q3 increased by $21 million compared to Q3 2024 [10] Business Line Data and Key Metrics Changes - Water utility earnings were $0.86 per share, up from $0.84 per share last year, primarily due to new water rates effective January 1, 2025 [8] - Electric segment earnings increased to $0.04 per share from $0.02 per share, attributed to new electric rates [9] - Earnings from American States Utility Services (ASUS) rose to $0.19 per share from $0.11 per share, driven by higher construction activity [23] Market Data and Key Metrics Changes - The water utility's rate base grew from $980.4 million in 2021 to $1,455.8 million in 2025, reflecting a compound annual growth rate (CAGR) of 10.4% [19] - ASUS was awarded $28.7 million in new capital upgrade construction projects, expected to be completed through 2028 [24] Company Strategy and Development Direction - The company plans to invest $180-$210 million in infrastructure for the year, focusing on long-term benefits for customers [5] - The company is preparing for its next water rate case, expected to be filed by July 1, 2026, and is optimistic about future growth despite industry mergers [15][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in regulated utilities and ASUS [37] - The company noted potential volatility in revenues and earnings due to changes in water consumption and supply source mix [16] Other Important Information - The company raised its quarterly dividend by 8.3%, maintaining a compound annual growth rate of 8.5% over the last five years [24] - American States Water Company was recognized on TIME's America's Best Mid-Sized Companies 2025 list and Barron's 100 Most Sustainable Companies for 2025 [6][7] Q&A Session Summary Question: Inquiry about ASUS contract timing and EPS impact - Management indicated that while there is a good backlog for capital upgrades, the transition period for new contracts may affect EPS in 2026 [31][32] Question: Clarification on new customer connections and rate base translation - Management explained that new customer connections depend on home purchases and developer agreements, making it challenging to predict rate base impacts [33][35] Question: Thoughts on M&A in the industry - Management acknowledged the recent merger in the industry but stated it would not impact the company's strategic direction, emphasizing confidence in growth plans [37][38]

Financial Performance - Consolidated diluted earnings per share increased by $0.11, or 11.6%, for Q3 2025, reaching $1.06 per share compared to $0.95 per share in Q3 2024[12, 13] - Year-to-date diluted earnings per share increased by $0.21, reaching $2.63 per share in 2025 compared to $2.42 per share in 2024[12, 20] - Total operating revenues increased to $182.7 million in Q3 2025 from $161.7 million in Q3 2024, a variance of $21.0 million[14] Segment Performance - Water segment earnings were $0.86 per share in Q3 2025, up from $0.84 per share in Q3 2024[13] - Electric segment earnings increased to $0.04 per share in Q3 2025 from $0.02 per share in Q3 2024[13] - Contracted Services (ASUS) earnings rose to $0.19 per share in Q3 2025 from $0.11 per share in Q3 2024[13, 35] Regulatory and Capital Investment - Regulated utilities are on pace to invest between $180 million and $210 million for the year[12, 21] - GSWC is authorized to invest $573.1 million in capital infrastructure over the three-year capital cycle (2025-2027)[25, 29] - BVES is authorized to invest $75.6 million in capital infrastructure over the four-year rate cycle[31] Other Key Points - ASUS was awarded $28.7 million in new capital upgrade construction projects through year-to-date September 2025, to be completed through 2028[12, 35] - The Board of Directors approved a fourth-quarter cash dividend of $0.5040 per share, reflecting an 8.5% compound annual growth rate over the last 5 years[38, 37]

Core Insights - American States Water Company (AWR) reported third-quarter 2025 operating earnings per share (EPS) of $1.06, exceeding the Zacks Consensus Estimate of $1.01 by 4.95%, and up from 95 cents in the same quarter last year [1][10] AWR's Total Revenues - Total operating revenues reached $182.72 million, surpassing the Zacks Consensus Estimate of $178 million by 2.65%, and reflecting a 12.9% increase from $161.78 million in the prior-year period [2][10] Highlights of AWR's Q3 Release - Operating expenses totaled $121 million, a 13.4% increase from $106.7 million in the year-ago quarter, driven by higher costs in water purchases, power purchases for resale, administrative expenses, maintenance, and ASUS construction [3] - Operating income was $61.7 million, up 11.9% from $55.1 million in the corresponding period of 2024 [3][10] Interest Expenses and Income - Interest expenses amounted to $11.7 million, down 13.4% year over year due to decreased average borrowing levels and interest rates, despite a decline in interest income from regulatory assets [4] - Interest income totaled $1.1 million compared to $1.7 million in the year-ago quarter [4] Regulatory Approvals and Growth - AWR's regulated water utility received CPUC approval to provide water services to a new planned community, expected to serve up to 3,800 customer connections over the next five years, with potential for 17,500 total dwelling units at full buildout over 20+ years [5] Segmental Details - Earnings from the Water segment were 86 cents per share, up 2.38% from 84 cents a year ago, attributed to new CPUC-authorized rate increases effective January 1, 2025 [6] - EPS from the Electric segment was 4 cents, an increase of 2 cents from the previous year, driven by higher revenues from new rates implemented in 2025 [7] - EPS from the Contracted Services segment was 19 cents, up 8 cents from the year-ago quarter [7] Financial Update - As of September 30, 2025, cash and cash equivalents totaled $26.1 million, down from $26.7 million as of December 31, 2024 [11] - Long-term debt amounted to $790.3 million compared to $640.4 million as of December 31, 2024 [11] - Cash provided by operating activities in the first nine months of 2025 totaled $202.1 million, up from $134.2 million in the year-ago period [11] Guidance - AWR's regulated utilities are authorized to spend nearly $650 million in capital investments, targeting to invest $180 to $210 million in 2025 [12] - The contracted services business is expected to contribute 59 cents to 63 cents per share for the whole year [12] Zacks Rank - American States Water currently holds a Zacks Rank 2 (Buy) [13]

分组1 - American States Water (AWR) reported quarterly earnings of $1.06 per share, exceeding the Zacks Consensus Estimate of $1.01 per share, and up from $0.95 per share a year ago, representing an earnings surprise of +4.95% [1] - The company posted revenues of $182.72 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.65%, compared to year-ago revenues of $161.78 million [2] - The stock has underperformed the market, losing about 4% since the beginning of the year, while the S&P 500 gained 15.1% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.70 on $156 million in revenues, and for the current fiscal year, it is $3.30 on $646 million in revenues [7] - The Utility - Water Supply industry is currently in the top 27% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - American States Water has a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6]