With summer starting and the heat rising, we all could use an ice-cold glass of water. Perhaps not just to quench our thirst, but for our portfolios as well. Despite its importance for life, we often ignore water’s potential. However, water can be a steady dividend payer. This is especially true for our Best Dividend Stocks List pick in the sector. Our pick has been a steady dividend payer throughout its history and has continued to reward shareholders with stable income and low volatility.
The best part is that its growth could still be on the horizon.
Thanks to the pandemic, many municipalities are finding themselves cash-strapped. And given the wide range of needed infrastructure improvements, these local governments are turning to the private sector to get the job done. This is where our pick continues to shine and has long grown via its acquisition. The wonderful news is our pick is often able to score valuable rate increases in these sorts of transactions, which adds a steady diet of cash flows to its bottom line.
But the growth doesn’t stop there. The pandemic is adding an additional boost to the pick’s bottom line.
In order to combat the stalling economy, the Trump administration, Congress and state governments are looking to provide infrastructure money in their latest stimulus package. This could foresee grants and low-cost loans for improvements to our water systems. For our pick, it could also mean plenty of cheap capital to fund future cash flows.
All in all, our pick has the perfect blend of stability and growth potential for today’s market environment. Investors should take a drink of our pick.
To summarize, here are five reasons why you should own this stock:
- One of the largest water utilities in the nation serving over 47 states!
- Benefits from defense contracts and other non-regulated water services to boost EPS/margins further.
- Was able to realize a nearly 10% increase in EPS last quarter! Very strong considering the ongoing pandemic!
- Acquisitions and M&A continue to fuel bolt-on growth.
- Healthy payout ratio of 57% and growing yield of 1.57%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary Dividend.com Rating system. Go Premium to find out the entire list.
