American State Water cut to Sell at Janney

• American States Water (AWR -3.1%) is downgraded to Sell from Neutral at Janney, which says shares are trading at a significant premium to other players in the water utility segment.
• AWR’s low payout ratio of ~55% can support further dividend increases, but the company’s earnings growth during 2015-17 likely will be constrained unless it secures significant new military base contracts, the firm says.
• A better than expected outcome of the California General Rate Case could have a positive impact on AWR’s earnings, Janney notes.