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Water Droplets on Screen

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Water Utilities Monopoly Powers Its Way Onto Best Dividend Stocks List

Abhishek Gupte Jul 11, 2016


Dividend.com has added a water utilities company to the Best Dividend Stocks list and removed a biotech company. This water utilities company has a complete monopoly over the 1 million people it serves in the city it operates in. The firm was founded in the 1800s and is a dividend aristocrat almost two times over with 47+ years of consecutive dividend increases. Over the last 10 years, the company has managed to increase its payout by more than 42%.

Apart from water utilities the firm also has plenty of unregulated businesses in the form of real estate development. These businesses provide extra “oomph” to an otherwise boring core-water business.

This company still has plenty of room to keep growing its dividend as its payout ratio sits very comfortably at 46% based on 2016 earnings estimates.

To summarize, here are 4 reasons why you should own this stock:

  1. The company is a dividend aristocrat almost two times over with 47+ consecutive years of dividend increases.
  2. Complete monopoly over the area it operates in.
  3. Real estate development business along with water provision adds diversification in terms of revenue mix.
  4. Utilities have been bid up by investors as they attempt to hedge themselves against market volatility.

Soft Removal of a Biotech Stock from the Best Dividend Stocks List

We added this biotech stock to the Best Dividend Stocks list back in 2015. Unfortunately, the market treated this stock as too much of a growth one rather than a dividend-paying one – and it is down 25% since we added it. This company initiated a dividend two years back and has a strong buyback program. Even though this stock is down from where we recommended it, we continue to stay very bullish on it and believe it’s going to be the next dividend aristocrat.

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