How Does American States Water Company's (NYSE:AWR) Earnings Growth Stack Up Against Industry Performance?
Assessing American States Water Company's (NYSE:AWR) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess AWR's latest performance announced on 30 September 2019 and evaluate these figures to its historical trend and industry movements.
View our latest analysis for American States Water
Commentary On AWR's Past Performance
AWR's trailing twelve-month earnings (from 30 September 2019) of US$81m has jumped 29% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.0%, indicating the rate at which AWR is growing has accelerated. What's the driver of this growth? Let's see whether it is solely due to an industry uplift, or if American States Water has experienced some company-specific growth.
In terms of returns from investment, American States Water has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.3% exceeds the US Water Utilities industry of 3.8%, indicating American States Water has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for American States Water’s debt level, has declined over the past 3 years from 9.1% to 8.6%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 62% to 80% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research American States Water to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for AWR’s future growth? Take a look at our free research report of analyst consensus for AWR’s outlook.
Financial Health: Are AWR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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