Connecticut Water Service Inc. (CTWS) continues to maximize shareholder value through the payment of incremental dividends. The board of directors of the company has approved of a 4% sequential hike to its quarterly cash dividend rate. The revised dividend of 25.75 cents will be paid on Sep 16, 2014 to shareholders of record as of Sep 2.
On an annualized basis, Connecticut Water Service’s dividend rate will come to $1.03 per share. The annual dividend yield will be 3.2%, marginally lower than the sector average.
Past records show that Connecticut Water Service has a steady dividend payment history. The company has increased its quarterly dividend rate for 45 consecutive years. Connecticut Water Service is paying dividends since 1956. The last quarterly dividend hike was made in Aug 2013. The quarterly dividend had increased 2.1% to 24.75 cents per share from the previous payout.
During the first six months of 2014, Connecticut Water Service’s operating cash flow increased 1.6% to $13.6 million from the prior-year comparable figure. As of Jun 30, 2014, the company had cash and cash equivalents of $10.6 million. A stable cash generation capacity enables the company to maintain its dividend payment record. During the first half of 2014, Connecticut Water Service paid $5.5 million as cash dividend, up 3% year over year.
In addition to paying dividends, Connecticut Water Service also utilizes its funds to strengthen its operations through strategic acquisitions and organic growth projects, besides upgrading existing infrastructure. These initiatives will enable the company to provide reliable services to its customers, while complying with government regulations and public safety norms.
Apart from Connecticut Water Service, other water utilities like American States Water Company (AWR) and Aqua America Inc. (WTR) also follow a practice of paying dividends and revising them regularly.
Connecticut Water Service currently holds a Zacks Rank #1 (Strong Buy). Another equally good stock with a comparable rank in the same industry is Consolidated Water Co. Ltd. (CWCO).