What happened

Shares of water utility owner American States Water (AWR 1.45%) rose 6.7% in March, according to data from S&P Global Market Intelligence. Normally, that wouldn't even merit a mention. But March was not your typical month in the stock market, with the S&P 500 Index ending the span down 13%. So, American States Water didn't just go up a little bit; it outperformed the broader market by nearly 20 percentage points -- that's huge!

So what

The S&P 500's drop of 13% doesn't even come close to capturing the full picture last month. March saw the market fall into a bear market driven by very real concerns around the impact of COVID-19. It was one of the fastest bear markets in history, by the way. But even that was outdone by the bull market that materialized in March -- the 20% bounce off the bottom took just a few days. It wouldn't be hyperbole to say that heads were spinning on Wall Street.

A faucet dripping water

Image source: Getty Images.

And through it all, the ups and downs in the shares of American States Water were relatively muted. To be fair, the last month or two have seen some notable ups and downs in American States Water's stock from a historical perspective, but it was still not nearly as bad as what happened to the broader market. That makes a lot of sense when you think about what American States Water does: ensuring people have safe drinking water. Water isn't something humans can do without for very long, so bear markets, bull markets, and economic recessions (even global ones) aren't going to put too big of a dent into American States Water's business. 

On that score, American States Water has a couple of things going for it. First, the water sector is still highly fragmented in the United States. Right now, the company is focusing on expanding its business of running water systems on military bases. As the government deals with the financial impacts of COVID-19, growth opportunities here could actually increase. The company might even be able to acquire new municipal systems along the way, too.

Then there's the fact that the U.S. water infrastructure is in desperate need of upgrading. So American States Water, which largely operates regulated utilities, should also be able to get government approval for rate hikes as it spends on upgrades. It has capital spending plans of between $120 million and $135 million in 2020, after spending a record $136 million in 2019.   

Now what

At its core, American States Water provides something we can't live without, and there's ample room for the company to keep growing -- slowly. All of that remains true in a bull market, a bear market, or if the impact of COVID-19 continues to worsen (or get better). Boring is just par for the course, here. If you're looking for a place to ride out the storms in the broader market today, American States Water is worth a look.

That said, investors are well aware of the stability involved, and the stock is rarely cheap. With a modest 1.6% dividend yield and a history of slow and steady growth over time, this stock probably won't be of interest to every investor. In that case, cash might be a better place for hiding from the market's storms.