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Water Utilities with Best Dividend Yield – Theme of the Next Decade?

Water is an interesting investment idea. It is the only resource which is not interchangeable because there is no alternative and people really need it to live. In addition, the source of water is getting rare. The climate warming is a major driver as well as the growing population worldwide. If you combine these items with a stable business like the water utilities industry, you should have a really interesting investment for the future.

I screened the water utilities industry by stocks with a dividend yield of more than 3 percent as well as a beta ratio of less than 0.5. In addition, the market capitalization should be over $500 million. The last criterion is a very strict one because the industry has only 11 listed stocks. The average market capitalization of a water utility is just $1 billion.

Here are the 3 most promising stocks:

1. American Water Works (AWK) hasa market capitalization of $5.2 billion, generates revenues in an amount of $2.7 billion and a net income of $279.6 million. It follows P/E ratio is 18.6 and forward price to earnings ratio 16.2, Price/Sales 1.9 and Price/Book ratio 1.3. Dividend Yield: 3.1 percent. Years of Consecutive Dividend Increasing: 2 Years. 5-Year Dividend Growth: 0 percent. The company paid dividends since 2008. The beta ratio amounts to 0.36.

2. Aqua America (WTR) hasa market capitalization of $3.0 billion, generates revenues in an amount of $746.7 million and a net income of $140.6 million. It follows P/E ratio is 21.4 and forward price to earnings ratio 20.2, Price/Sales 4.0 and Price/Book ratio 2.5. Dividend Yield: 3.0 percent. Years of Consecutive Dividend Increasing: 19 Years. 5-Year Dividend Growth: 7.3 percent. The company paid dividends since 1939. The beta ratio amounts to 0.22.

3. California Water Service Group (CWT) hasa market capitalization of $763.6 million, generates revenues in an amount of $481.4 million and a net income of $40.2 million. It follows P/E ratio is 19.1 and forward price to earnings ratio 12.7, Price/Sales 1.6 and Price/Book ratio 1.7. Dividend Yield: 3.4 percent. Years of Consecutive Dividend Increasing: 43 Years. 5-Year Dividend Growth: 0.9 percent. The company paid dividends since 1990. The beta ratio amounts to 0.29.

Take a closer look at the full table of 11 best yielding water utilities. The average P/E ratio amounts to 20.7 while the average forward P/E ratio is 17.4. The dividend yield has an average value of 3.4 percent. Price to book ratio is 1.8 and price to sales ratio 2.7.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

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