A Higher Water Dividend (AWR, AWK, CWT)

Jon C. Ogg

American States Water Co. (NYSE: AWR) has just announced that it is raising its dividend. The water utility said this brings its payout ratio more in-line with its industry peers and that this higher payout reflects its earnings sustainability from its contracted services business.

The company’s board of directors has approved a $0.075 per share increase in its quarterly cash dividend to $0.355 per share for the common stock of the company, a gain of 27%. It is also the company’s 305th consecutive dividend payment and the 58th consecutive year in which American States Water Co. shareholders have received an increase in their annual dividend payments.

This might not sound like much since the volume is about 100,000 shares per day and with a market cap of $766 million. The new dividend yield is actually 3.5% now for new investors, and we would argue that with the recent sector price gains that this is an above-peer payout.

Industry leader American Water Works Company Inc. (NYSE: AWK) now only pays about 2.7% to new investors buying at the current prices, and it already recently saw a dividend hike. California Water Service Group (NYSE: CWT) currently has a yield of about 3.4%, but that is also a $774 million market cap.