Friday, September 09, 2011

Will High Yield Water Stocks Clench Your Thirst?

Recently, there has been significant discussion in the press about moving water from flood hit areas to drought stricken areas. Unfortunately, it wouldn't really be feasible due to the extremely high costs to build a pipeline and the inability to predict where the next flood will take place.

At least water distribution companies are able to distribute water to their customers. Water utility stocks can provide a decent income, growth potential, and diversification, yields ranging from 2.5% to in excess of 4%. There are almost a dozen water utility stocks with dividends that were turned up by on their water utility list that was just updated.

The York Water Company (YORW) is one example, yields 3.1%. The stock trades at 20.7 times forward earnings. Earnings for the latest quarter were up 4.9% on a 7.2% rise in revenues. The company is a distributor of drinking water in Pennsylvania.

American Water Works Co., Inc. (AWK) is a New Jersey based distributor of water in 35 states and two Canadian provinces. The stock trades at 16 times forward earnings, with a decent 3.1% yield. Earnings for the quarter were up an amazing 16.2% from the previous quarter on a 6.2% increase in revenues.

SJW Corp. (SJW) is a San Jose, California based water distributor which serves the Silicon Valley area and has customers in Cupertino, San Jose, Campbell, Monte Sereno, Saratoga, Los Gatos, and parts of Santa Clara County. The stock trades at 19.5 times forward earnings and pays a yield of 3.0%.

To see a free list of all the top yielding water stocks, which can be downloaded, updated, and sorted, check out

Disclosure: Author did not own any of the above at the time the article was written.


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