Start here if you're new
what it is
It sells water to 499,400 customers across 100 communities, mostly in California, where your tap bill becomes its revenue.
how it gets paid
Last year California Water made $964M in revenue. Residential was the main engine at $645.9M, or 67% of sales.
why it's growing
Revenue grew 6.4% last year. Still, california water’s long-term fundamentals remain solid, supported by predictable demand, a constructive regulatory framework, and a long history of dividend growth.
what just happened
The quarter came in light, with EPS at $0.19 versus $0.34 expected, a 44.12% miss.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
45/100 earnings predictability — expect surprises
18.8x trailing p/e — priced about right
3.0% dividend yield — cash in your pocket every quarter
7.0% return on capital — nothing to write home about
xvary composite: 56/100 — below average
What they do
It sells water to 499,400 customers across 100 communities, mostly in California, where your tap bill becomes its revenue.
This is a regulated monopoly in practice. In California, it serves about 90% of its 499,400 customers, and you do not switch water pipes the way you switch phone plans. Rate base growth of nearly 12% a year means more utility assets regulators let it earn on, so more pipes today can mean more profit later.
How they make money
$964M
annual revenue · their business grew +6.4% last year
Residential
$645.9M
Business
$192.8M
Industrial
$28.9M
Public authorities
$48.2M
Other
$48.2M
The products that matter
regulated water delivery
Regulated Water Utility
$1.0B revenue
it is the entire $1.0B revenue base. If rate cases go well, earnings follow. If they do not, there is no other engine hiding elsewhere.
100% of revenue
captive service footprint
Customer Accounts
499,400 accounts
those 499,400 accounts across 100 communities make demand steadier than most industries. People cut vacations before they cut water service.
defensive demand
infrastructure growth plan
Rate Base Expansion
~12% compounded growth target
management reiterated nearly 12% compounded annual rate base growth and deployed roughly $135M during the quarter. For a regulated utility, capex is not overhead — it is the growth plan.
growth lever
Key numbers
3.0%
dividend yield
You get a 3.0% cash payout today, while projected dividend growth is 5.5% versus 1.5% past sales growth, so shareholder payouts are growing faster than the business used to.
18.8x
trailing p/e
Price-to-earnings means what you pay for each dollar of profit. You are paying 18.8 years of trailing earnings for a utility with a lowered outlook rank of 4.
17.7%
operating margin
Operating margin means how much profit is left after running the business. CWT keeps 17.7 cents from each revenue dollar before interest and taxes.
$1.1B
long-term debt
Debt is 30% of capital, which is manageable for a utility, but it still matters when rate decisions and financing costs decide how fast earnings grow.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 2 — safer than 80% of stocks
- price stability 85 / 100
- long-term debt $1.1B (30% of capital)
- return on equity 10% — $0.10 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CWT 3 years ago → it's now worth $7,610.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
The quarter came in light, with EPS at $0.19 versus $0.34 expected, a 44.12% miss.
Revenue was about $220 million in Q4 2025, below the roughly $232.0 million consensus. Wet weather dampened demand, while full-year 2025 EPS slipped to $2.30 from $3.26 in 2024.
$220.0M
revenue
$0.19
eps
17.7%
operating margin
the number that mattered
The 44.12% EPS miss matters because utilities are supposed to be boring, and boring companies do not usually miss by almost half.
-
revenue of $311 million rose about 4% vs. prior year but fell short of our forecast, while earnings of $1.03 per share were in line with estimates and unchanged from the prior-year period.results reflect the ongoing dynamics of the current california rate case cycle, as well as the timing of rate relief and weather-driven consumption patterns. capital investment remained elevated, with roughly $135 million deployed during the quarter as the company continues to modernize its system. looking ahead, the operating outlook remains largely intact, though near-term regulatory timing bears watching.
-
management reiterated its expectation for nearly 12% compounded annual rate base growth tied to the pending california general rate case and infrastructure plan, supported by sustained capital spending and ongoing pfas compliance efforts.importantly, authorization to implement an interim inflationary rate adjustment if the rate case decision is delayed adds a layer of downside protection. growth outside california also remains a positive, with texas expansion and smaller tuck-in acquisitions expected to contribute incrementally over time.
-
shares have slipped about 5% in value since our last review, likely reflecting the modest revenue shortfall and lingering regulatory uncertainty.still, california water’s long-term fundamentals remain solid, supported by predictable demand, a constructive regulatory framework, and a long history of dividend growth. while year-ahead performance may lag broader market averages, the stock continues to offer appeal for conservative investors focused on stability, income, and gradual capital appreciation over the long run.
-
accounts with a long-term investment horizon may be rewarded nicely from a position here.
-
our 3 to 5-year target price range indicates strong capital appreciation potential.
source: company earnings report, 2026
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What could go wrong
the #1 risk is an unfavorable california general rate case outcome.
med
California rate relief comes in late or light
This business earns through regulation. If California delays or trims the allowed economics behind the pending case, revenue growth and returns get capped at the source.
Impact: 100% of the $1.0B revenue base depends on the regulated model, and the current return-on-equity profile is 10%.
med
Weather and conservation can still move usage
Water is essential. Water consumption is not perfectly steady. Drought rules, conservation measures, and mild weather can all reduce the volume that runs through the system in a given quarter.
Impact: the latest setup calls for just 3% revenue growth on $0.3B of quarterly revenue, which tells you this is a slow-moving model with little room for volume misses.
med
Capex recovery has to keep pace with spending
Management deployed roughly $135M during the quarter and is spending heavily on modernization and PFAS compliance. That spending only creates shareholder value if regulators let it earn inside the rate base fast enough.
Impact: with $1.1B of long-term debt already on the balance sheet, delayed recovery would pressure cash flow before it shows up in reported earnings.
100% of its $1.0B revenue sits inside a regulated utility model, so the biggest risks are concentrated rather than diversified.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
california general rate case decision
This is the main event. The case determines how much of the capex plan can earn and how credible that nearly 12% compounded rate base growth target really is.
metric
quarterly capital spending
Recent deployment was roughly $135M in one quarter. You want that pace to remain productive, not just expensive.
trend
rate base growth holding near 12%
Management reiterated nearly 12% compounded annual growth. If that slips, the long-duration utility case loses a lot of its appeal.
risk
consumption and conservation patterns
Revenue can still wobble when weather or conservation rules change customer usage. In a low-growth utility, small volume changes matter more than they look.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts do not expect this stock to outrun most of the market from here.
risk profile
above average
stability score 2 — safer than roughly 80% of stocks, which is exactly what you want from a water utility.
chart momentum
average
technical score 3 — the chart is not sending a strong message either way.
earnings predictability
45 / 100
That is low for a utility. Translation: regulatory timing and usage trends make quarterly numbers less tidy than the business model suggests.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 151 buyers vs. 139 sellers in 3q2025. total institutional holdings: 50.5M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$37
$64
$43
current price
$51
target midpoint · +18% from current · 3-5yr high: $80 (+85% · 19% ann'l return)
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