H2O America (HTO) AI Stock Analysis

H2O America, formerly known as SJW Group, provides water utility and related services in the United States. The company produces, purchases, stores, purifies, distributes, wholesales, and retails water and wastewater services. It supplies groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from Valley Water District. Additionally, H2O America offers non-tariffed services, including water system operations, maintenance agreements, antenna site leases, contracted services, sewer operations, and the Linebacker protection plan in Connecticut and Maine. The company also owns undeveloped land in California as well as commercial properties and land parcels in Connecticut.

Revenue increased from $573.7M in FY2021 to $800.6M in FY2025, representing a 5-year revenue CAGR of 7.2%. Over the same period, net income rose from $60.5M to $102.6M, with EPS expanding from $1.93 to $2.98. Operating margin was 19.4% in FY2021 and reached 22.6% in FY2025, though gross margin decreased to 46.7% in FY2025 from 56.8% in FY2024. Over the trailing twelve months, revenue reached $828.5M with an operating margin of 21.3% and a profit margin of 12.9%. In the latest quarter ended June 30, 2026, revenue increased 6.2% year-over-year, while quarterly earnings declined 12.6%.

As of June 30, 2026, H2O America had $104.1M in cash and short-term investments alongside total debt of $1.89B, leaving net debt at $1.79B. Shareholders' equity was $1.84B, with a debt-to-equity ratio of 1.03 and a current ratio of 1.67. In FY2025, the company generated operating cash flow of $244.8M but spent $522.9M on capital expenditures, producing free cash flow of -$278.1M. Cash distributions included $58.6M in dividends paid during FY2025, while the share count expanded 36.0% over five years.

Trading at $57.69, H2O America carries a trailing P/E of 20.4x and a forward P/E of 22.9x, compared to medians of 20.6x and 17.2x for its US-listed Utilities peers. Its enterprise value of $4.39B equates to an EV/EBITDA of 13.7x, above the peer median of 12.1x, and its price-to-sales ratio is 2.9x against the peer median of 2.4x. Over the past year, the stock gained 19.2%, outpacing the S&P 500 (SPY) return of 16.8%, though its 5-year return of -3.0% lagged the index's 83.0% gain.

H2O America pays a quarterly dividend with an annualized forward payout of $1.76 per share, providing a dividend yield of 3.05%. The company has paid dividends for 47 consecutive years and recorded a 5-year annualized dividend growth rate of 5.6%. The payout ratio stands at 59.0%, and its last ex-dividend date was August 10, 2026.

Analyst coverage consists of 4 Strong Buy, 1 Buy, and 2 Hold ratings, with zero Sell or Strong Sell ratings. The mean price target is $67.00, which is 16.1% above the last close of $57.69. For the fiscal year ending December 31, 2026, analysts estimate revenue of $867.6M and EPS of $2.75, representing an EPS decline of 8.0%. H2O America has beaten EPS estimates in 3 of the last 4 quarters, and its next earnings date is October 26, 2026.

This page is an AI-written research summary of H2O America (HTO). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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