Few companies can claim a 71-year dividend growth streak — but that's exactly what American States Water has done. For income investors, this utility stock offers a rare combination of consistency and predictability in a volatile market.
American States Water has paid dividends to its shareholders since 1931. But the real story began in 1955, the year Disneyland opened, when the company began consistently increasing its payouts. This uninterrupted streak has made it one of the longest-tenured Dividend Kings — a group of companies that have raised dividends for at least 50 years in a row.
The company operates in the utility sector, providing essential services like water and wastewater treatment to over 265,000 residents in California and electricity to around 25,000 additional customers. It also contracts services with the U.S. government.
The secret to American States Water's longevity is its steady revenue stream. About 78% of its quarterly revenue comes from regulated operations, which means management can plan with a high degree of accuracy. This predictability allows the company to spend capital on infrastructure, make acquisitions, and still return a growing portion to shareholders.
Over the past decade, the company has kept its payout ratio — the percentage of earnings paid out as dividends — conservative, averaging just 56.7%. This shows that management is not stretching finances to meet dividend expectations.
A Discounted Entry Point
Despite its track record, American States Water is currently trading at a lower valuation compared to its historical average. Shares are valued at 18 times operating cash flow, below their five-year average multiple of 10.3. This makes the stock an intriguing candidate for investors looking to add a stable, income-producing asset to a diversified portfolio.
While tech stocks and high-growth companies often grab headlines, American States Water proves that boring can be better. For investors seeking dependable returns without the volatility of trend-driven investments, this utility stock offers a compelling case.