This Boring Company Has Hiked Its Dividend for 71 Straight Years, and It’s an Income Investor’s Dream

From quantum computing stocks to cutting-edge pharmaceutical stocks, there are plenty of tickers dominating the headlines thanks to the compelling narratives behind these companies.

But there’s something to be said for tried-and-true companies with resilient business models that provide a solid financial footing for returning capital to shareholders year after year, decade after decade — companies like American States Water (AWR -0.56%).

Image source: Getty Images.

Dividend growth as old as Disneyland

Not many companies can lay claim to paying dividends since 1931, but that’s merely one of the feathers in the cap of utility stock American States Water, which provides water and wastewater treatment to more than 265,000 California residents and electric service to about 25,000 customers in the Golden State. It also provides contracted services to the U.S. government.

American States Water is steadfastly dedicated to growing its dividend. Since 1955, when Disneyland opened, it has raised its dividend annually — a 71-year stretch. This makes it one of the longest-tenured Dividend Kings, companies that have raised their dividends for at least 50 consecutive years.

How does American States Water pull it off? Because the lion’s share of its operating revenue comes from its regulated business (about 78% in Q1), management has excellent insight into future cash flows. This enables it to plan for capital expenditures such as infrastructure upgrades, acquisitions, and dividend payments.

Today’s Change

(-0.56%) $-0.48

Current Price

$85.16

Key Data Points

Market Cap

$3.4BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$84.56 – $86.97

52wk Range

$69.45 – $90.11

Volume

107.9K

Avg Vol

332.2K

Gross Margin

50.39%

Dividend Yield

2.35%

Consistently growing dividends is enticing, but mean little if management jeopardizes the company’s financial health. To this end, American States Water distinguishes itself. Over the past 10 years, the company has averaged a conservative payout ratio of 56.7%.

Is now the time to dip your toes into an American States Water investment?

There’s no denying the excitement of tech stocks, but there’s more to investing than simply identifying the most exhilarating opportunities. Portfolio diversification is one of the cornerstones of successful investing, and fortifying your holdings with a stalwart utility stock like American States Water can certainly help.

With shares trading at 18 times operating cash flow, a discount to their five-year average multiple of 10.3, now’s a great time to consider a position.