The York Water Company YORW announced on Nov. 26, 2024, that its board of directors has increased its dividend by 4%. The new quarterly dividend will be 21.92 cents per share compared with the previous quarter’s 21.08 cents. The new dividend will be payable on Jan. 15, 2025, to stockholders of record as of Dec. 31, 2024.
This marks the company’s 616th consecutive dividend payment. YORW has increased its dividends for 28 consecutive years. This increased dividend resulted in an annualized dividend of 87.68 cents per share compared with the previous level of 84.32 cents. The current dividend yield is 2.35%, higher than the Zacks S&P 500 composite's average of 1.19%.
Can Dividend Hikes Be Sustained by York Water?
York Water continues to benefit from its strategic investments and acquisitions that help provide safe, reliable and high-quality water and wastewater services to its customers. During the first nine months of 2024, the company invested $33 million in capital projects for armoring and replacing the spillway of the Lake Williams dam, wastewater treatment plant construction, as well as various replacements and improvements to infrastructure and routine items.
The company also spent $264,000 to purchase wastewater and water infrastructure, including the Houston Run Community Water System. York Water currently operates in 57 communities across four counties in south-central Pennsylvania, and this is its second purchase in Lancaster County.
YORW expects to invest an additional $9.7 million in 2024, and nearly $46.1 million in 2025, excluding acquisitions, for additional main extensions, completion of armoring and replacement of the spillway of the Lake Williams dam, wastewater treatment plant construction, an upgrade to the enterprise software system, and improvements to its pipes, service lines and other facilities.
YORW’s growth prospects and ability to further enhance its performance indicate that management will have enough funds to sustain its shareholder-friendly initiatives in the future.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, Global Water Resources GWRS, Entergy Corporation ETR and American States Water Company AWR have raised their quarterly dividend rate by 1%, 6.2% and 8.3%, respectively.
The Zacks Consensus Estimate for Global Water Resources’ 2024 earnings per share (EPS) implies an improvement of 7.7% from the previous year’s level. GWRS’ current dividend yield is 2.25%.
The Zacks Consensus Estimate for ETR’s 2024 EPS implies an improvement of 6.7% from the previous year’s level. ETR’s current dividend yield is 3.07%.
The Zacks Consensus Estimate for American States Water’s 2024 EPS implies an improvement of 6% from the previous year’s level. AWR’s current dividend yield is 2.18%.
YORW’s Stock Price Performance
In the past month, York Water’s shares have risen 1.1% compared with the industry’s growth of 1.4%.
Image Source: Zacks Investment Research
YORW’s Zacks Rank
York Water currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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