The Board of Directors of American States Water Company (AWR) extended its practice of sharing more benefits with its shareholders by increasing cash dividend rate. The company has increased its quarterly cash dividend by 14.1% sequentially to 40.50 cents per share. It will be paid on Sep 3, 2013 to shareholders of record as of Aug 15.
As a result of this revision, American States Water’s annualized cash dividend rate will be $1.62 per share. The new annual dividend yield will be 2.9%, which is higher than the sector average of 2.2%.
American States Water values its owners and has a long history of increasing dividend to maximize their wealth. The company is paying dividends to its shareholders every year since 1931. With the latest dividend, it has hiked dividend for shareholders in each calendar year in 59 consecutive years. The last hike was in Aug 2012. Quarterly cash dividend increased 26.7% sequentially to 35.50 cents per share.
The board of American States Water not only increased the quarterly dividend rate, but also approved a 2-for-1 stock split. The company’s share price moved up 54.2% in the last twelve months, closing at $54.94 at the end of the trading session on May 21, 2013. The stock split will be effective from Sep 3, 2013 and we believe it will allow more investors to invest in this organization.
American States Water’s cash flow from operating activities at the end of first-quarter 2013 was $31 million versus $26.6 million in the comparable period last year. In first-quarter 2013, the company utilized $6.8 million for dividend payouts. American States Water’s consistent cash flow generating ability will easily provide additional $1 million required for increased dividend payment.
Like American States Water, a few other water utility operators have also raised their quarterly dividend rates in recent months. Aqua America Inc. (WTR), Artesian Resources Corporation (ARTNA) and American Water Works Company, Inc. (AWK) have raised their quarterly dividend rate by 9%, 1.5% and 12%, respectively.
San Dimas, Calif.-based American States Water was founded in 1929. The company caters to customers in the United States and distributes water, electricity and other allied services. The company currently has a Zacks Rank #2 (Buy).
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