3 Water Stocks With Decades Of Rising Dividends

Water is one of the most vital components of life. It is thus natural that some investors seek to include water stocks in their portfolios. In general, water stocks have simple business models and are resilient to recessions thanks to the essential nature of their business. 

As a result, some water stocks have multi-decade dividend growth records. In this article, we will focus on three water stocks with decades of rising dividends.

Water Stock #1: California Water Service (CWT)

California Water Service is the third-largest publicly-owned water utility in the United States. The company has six subsidiaries that provide water to about two million people, mainly in California, with some additional operations in Washington, New Mexico, and Hawaii. California Water Service has raised its dividend for more than 50 consecutive years, qualifying it as a Dividend King.

California Water Service is a typical utility. It has grown its earnings per share by approximately 4% per year on average over the last decade, primarily thanks to the approval of rate hikes from regulatory authorities. 

The hefty capital expenses required for maintenance and expansion take its toll on the cash flows of water utilities. The significant capital expenses required in this business pose high barriers to entry to potential competitors and lead to durable competitive advantages. As a result, California Water Service can easily service a high debt load and keep growing its earnings per share and dividends.

In the most recent quarter, California Water Service grew its revenue by 7% and its earnings per share by 29%, thanks to rate hikes that were approved by regulatory authorities in the prior year.

Overall, California Water Service has a business model that is reliable and resilient to recessions thanks to the essential nature of its business. CWT has increased its dividend each year for over five decades, and will likely continue to increase its dividend reliably each year going forward.

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Disclaimer: All the information in this article - is published in good faith and for general information purpose only. Hashtag Investing does not make any warranties about the completeness, ...

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