72 Years Of Dividend Growth
A history of high dividend growth is a green flag for dividend investors.
Dividend growth ensures our income continues to rise and doesn’t get eaten away by inflation.
However, double-digit dividend growth isn’t everything.
Sometimes, having a long history of dividend growth is preferred for a few reasons.
First, it means the company is committed to growing its payments.
Second, it demonstrates the company’s resilience during recessions.
And one company has the longest track record of growing its dividend.
American States Water Co. (ticker: AWR) started paying dividends in 1931 and just increased its dividend for the 72nd consecutive year.
No stock has increased its dividend for as long as American States Water.
But the company isn’t just increasing its dividend by a small amount.
Over the past 20 years, American States Water has raised its dividend on average by almost 8% each year.
An 8% growth rate means American States Water is doubling its dividend every 9 years.
And the water utility is showing no signs of slowing down.
American States Water announced its next dividend payment will be $0.5455 per share, which is more than 8% higher than its previous payment.
But you need to own shares by the end of the week (August 14) to get the higher payment.
While American States Water’s dividend yield seems modest at 2.5%, just wait 6 years and your yield on cost will be 4%.
Let’s talk about the company.
American States Water is one of the largest water utilities in the U.S.
The water utility largely serves communities in California.
The part we’re most excited about is its relationship with the U.S military.
American States Water has 50-year contracts to provide water to military bases all over the U.S.
Utilities are considered stable relative to the rest of the stock market.
But American States Water has extra stability through its long-term contracts with the U.S military.
However, stability doesn’t mean there’s no growth.
Over the past decade, American States Water has raised its earnings by an average of 10.5% each year.
While its dividend payout ratio of 58% is on the higher end, as long as earnings are growing faster than dividends, there won’t be a problem.
Plus, the utility’s 20% profit margin is much higher than its peers and approaching an all-time high for the company.
Do you own any stocks with 50+ years of dividend growth?
Michael Jennings
Dividend Stocks Research
Category: Dividend Stocks To Buy?
