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American States Water (AWR) Could Be a Great Choice
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American States Water in Focus
Headquartered in San Dimas, American States Water (AWR - Free Report) is a Utilities stock that has seen a price change of 0.7% so far this year. Currently paying a dividend of $0.47 per share, the company has a dividend yield of 2.3%. In comparison, the Utility - Water Supply industry's yield is 2.15%, while the S&P 500's yield is 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.86 is up 12.4% from last year. In the past five-year period, American States Water has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.61%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, American States Water's payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
AWR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.03 per share, with earnings expected to increase 6.32% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that AWR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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American States Water (AWR) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American States Water in Focus
Headquartered in San Dimas, American States Water (AWR - Free Report) is a Utilities stock that has seen a price change of 0.7% so far this year. Currently paying a dividend of $0.47 per share, the company has a dividend yield of 2.3%. In comparison, the Utility - Water Supply industry's yield is 2.15%, while the S&P 500's yield is 1.59%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.86 is up 12.4% from last year. In the past five-year period, American States Water has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.61%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, American States Water's payout ratio is 60%, which means it paid out 60% of its trailing 12-month EPS as dividend.
AWR is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.03 per share, with earnings expected to increase 6.32% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that AWR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).