American Water Works (
), America's largest listed water and wastewater utility, has
boosted its dividend every year since going public in 2008. The
stock has also fared well.
The New Jersey-based company, which was spun off by European
utility RWE, operates in more than 40 states and parts of Canada.
It's expanded from 32 states in 2008 due mainly to
Profits have increased steadily in recent years, growing even
during the 2008-09 recession. As a result, the stock has a
Factor of 6 on a scale of 1 (most stable) to 99 (least
Its latest earnings report, released Aug. 6, showed that
profit for the second quarter increased 7% from the same period
last year. The result was lower than expected and marked a
slowdown from gains of 57% and 33% in Q4 of 2013 and in Q1 of
this year, respectively.
Revenue for the period rose 5%, slowing from a 7% increase in
Q1, as fallout from tainted drinking water due to a chemical
spill in West Virginia tempered gains from new customers and
Yet the stock is trying to rebound after falling below its
50-day line before the earnings report. It's up 14% this year,
easily outpacing the S&P 500's 5% gain. It's also working on
a flat base with a 49.65 buy point.
American Water boasts an annual dividend yield of 2.6% at the
current share price, well above the S&P average of 1.93%.
The company's most recent dividend hike came in April, when
the company boosted its quarterly payout by 3 cents, or 11%, to
31 cents a share.
American Water last month purchased the water and wastewater
assets of the Mt. Ebo Water Works and Mt. Ebo Sewage Works as it
expands into upstate New York. It also recently purchased water
and wastewater assets from the city of Millersburg, Ky., as part
of a strategy to grow by acquisitions.