A Lifetime of Passive Income Is Hiding in Plain Sight With This ETF and These 2 No-Brainer Dividend Kings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 04 2024
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Should l Buy AWR?
Source: NASDAQ.COM
Stock Market Performance: The S&P 500 and Nasdaq Composite have both risen over 20% in 2024, but new investors may find it challenging to enter the market without overpaying; however, there are still valuable dividend-paying stocks like PepsiCo and American States Water available.
Investment Opportunities: PepsiCo is highlighted for its reliable dividends despite recent underperformance, while American States Water boasts a long history of dividend increases and stable earnings growth, making them attractive options for passive income. Additionally, the Global X SuperDividend ETF offers diversification in high-yield equities with a current yield of 6.1%.
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Analyst Views on AWR
About AWR
American States Water Company is a holding company. Its segments include water, electric and contracted services. Within the segments, the Company has three principal business units: water and electric service utility operations conducted through its regulated utilities, Golden State Water Company (GSWC) and Bear Valley Electric Service, Inc. (BVES), respectively, and contracted services conducted through American States Utility Services, Inc. (ASUS) and its subsidiaries. GSWC is a public water utility engaged in the purchase, production, distribution and sale of water in 11 counties in the state of California and provides wastewater collection and treatment services. BVES is a public electric utility that distributes electricity in several San Bernardino County Mountain communities in California. ASUS operates, maintains and performs construction activities (including renewal and replacement capital work) on water and/or wastewater systems at various United States military bases.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Value of American States Water and Coca-Cola
- Stable Dividend Growth: American States Water has raised its dividend for 72 consecutive years, currently offering a forward yield of 2.7%, indicating its ability to provide stable income in uncertain market conditions, appealing to safety-seeking investors.
- Strong Earnings Growth: The company's EPS is projected to increase from $1.60 in 2015 to $3.37 by 2025, driven by ongoing investments in water infrastructure and approved rate hikes, showcasing significant growth potential for the future.
- Coca-Cola's Diversification Strategy: Coca-Cola has increased its dividend for 64 years, with a forward yield of 2.7%, and has strengthened its market position and profitability by diversifying its product line to counteract declining beverage consumption globally.
- Resilience Against Risks: Despite challenges such as the pandemic and inflation, Coca-Cola's EPS has grown from $1.67 in 2015 to $3.04 by 2025, demonstrating its stability and attractiveness in turbulent market conditions.
See More
Vicious Cycle Index Signals Economic Recession
- Vicious Cycle Index Overview: Moody's Analytics' Vicious Cycle Index (VCI) has accurately predicted 100% of U.S. recessions over the past 80 years without a single false alarm, demonstrating its effectiveness and reliability in economic forecasting.
- Unemployment Rate Indicator: The VCI is based on the Sahm Rule, which requires the three-month average unemployment rate to exceed the 12-month low by 1%, enhancing its accuracy in capturing recessions, especially in the context of declining labor force participation.
- Current Economic Condition: Chief economist Mark Zandi of Moody's Analytics believes that the U.S. economy has already entered a recession, despite the National Bureau of Economic Research not yet confirming it, with the probability of recession rising to 48.6%, surpassing predictions from other organizations.
- Investment Strategy Recommendations: Investors should consider purchasing recession-proof stocks such as Walmart, AbbVie, and American States Water, which tend to perform well during economic downturns, while also maintaining cash reserves to capitalize on potential investment opportunities.
See More
Vicious Cycle Index Warns of U.S. Recession
- Recession Signal: The Vicious Cycle Index (VCI) has accurately predicted all U.S. recessions since 1945 and currently indicates that the U.S. economy is in the early stages of a recession, prompting investors to adjust their strategies based on this critical indicator.
- Unemployment Rate Changes: The VCI improves upon the Sahm Rule by adjusting unemployment data using a five-year moving average of labor force participation, signaling a recession when the average unemployment rate rises more than 1% over the previous 12 months, enhancing its accuracy.
- Investment Strategy Recommendations: With rising recession risks, investors are advised to increase cash positions and consider buying recession-resistant stocks such as Walmart, AbbVie, and American States Water, which are likely to maintain stable dividend payments during economic downturns.
- Declining Market Confidence: Consumer confidence hit a record low in April, and the labor force participation rate fell to 61.9%, indicating that more Americans are giving up on job searches; Moody's Analytics raised the probability of a recession in the next 12 months to 48.6%, surpassing other organizations' forecasts.
See More
American States Water Co. Q4 Earnings Report
- Earnings Performance: American States Water Co. reported a fourth-quarter net income of $28.74 million, translating to an earnings per share (EPS) of $0.74, which is a slight decrease from last year's $28.43 million and $0.75 EPS, indicating minor fluctuations in profitability.
- Revenue Growth: The company's revenue for the fourth quarter rose by 14.8% to $164.27 million from $143.09 million last year, demonstrating significant progress in market demand despite the decline in earnings.
- Financial Comparison: While net income showed a slight increase compared to the previous year, the drop in EPS reflects potential cost pressures impacting profitability, necessitating attention to future cost control strategies.
- Market Outlook: Despite the fluctuations in earnings, the substantial revenue growth may provide funding support for future investments and expansions, highlighting the company's ongoing growth potential in the water utility sector.
See More
Three Top Dividend Stocks on Wall Street
- Dividend Growth Leader: Realty Income has declared dividends for 667 consecutive months since its 1994 IPO and has increased its payout for 113 consecutive quarters, showcasing its robust cash flow and stable business model, which enhances investor confidence.
- Long-Term Stable Returns: American States Water has raised its annual dividend for 71 consecutive years, targeting a compound annual growth rate of over 7% for future dividends, with its monopoly position in the water and electricity sector ensuring stable demand and predictable earnings.
- Historic Dividend Payer: York Water has paid dividends for 209 consecutive years, making it one of the longest-standing dividend-paying companies in the U.S., with its stable cash flow and undervaluation attracting long-term investors' interest.
- Market Potential: York Water plans to apply for a significant rate increase from the Pennsylvania Public Utility Commission, which could boost its full-year revenue by 32%, further solidifying its market position in the water utility sector.
See More
Automatic Data Processing Expects $21.8 Billion Revenue, Continues 51-Year Dividend Growth
- Stable Revenue Source: Automatic Data Processing anticipates a revenue of $21.8 billion for the fiscal year, reflecting a 5.8% increase, which underscores its strong market position in payroll processing and tax reporting, enabling consistent dividends for shareholders.
- Dividend Growth Strength: The company has raised its per-share dividend for 51 consecutive years, with a forward-looking dividend yield of 2.6%, indicating its stable profitability and enhancing investor confidence in its long-term investment value.
- Walmart's Market Dominance: Walmart's stock price has surged 156% over the past three years, and while its current dividend yield is only 0.8%, its significant influence in the U.S. retail market and ongoing stock buyback programs create additional value for shareholders.
- Growth Potential in Water Sector: American States Water has increased its dividend for 70 consecutive years, with an average annual growth of over 8% in the past decade, and with rising water scarcity and electricity demand, its market performance is expected to continue outperforming the broader market.
See More
Investment Value of American States Water and Coca-Cola
- Stable Dividend Growth: American States Water has raised its dividend for 72 consecutive years, currently offering a forward yield of 2.7%, indicating its ability to provide stable income in uncertain market conditions, appealing to safety-seeking investors.
- Strong Earnings Growth: The company's EPS is projected to increase from $1.60 in 2015 to $3.37 by 2025, driven by ongoing investments in water infrastructure and approved rate hikes, showcasing significant growth potential for the future.
- Coca-Cola's Diversification Strategy: Coca-Cola has increased its dividend for 64 years, with a forward yield of 2.7%, and has strengthened its market position and profitability by diversifying its product line to counteract declining beverage consumption globally.
- Resilience Against Risks: Despite challenges such as the pandemic and inflation, Coca-Cola's EPS has grown from $1.67 in 2015 to $3.04 by 2025, demonstrating its stability and attractiveness in turbulent market conditions.
See More
Vicious Cycle Index Signals Economic Recession
- Vicious Cycle Index Overview: Moody's Analytics' Vicious Cycle Index (VCI) has accurately predicted 100% of U.S. recessions over the past 80 years without a single false alarm, demonstrating its effectiveness and reliability in economic forecasting.
- Unemployment Rate Indicator: The VCI is based on the Sahm Rule, which requires the three-month average unemployment rate to exceed the 12-month low by 1%, enhancing its accuracy in capturing recessions, especially in the context of declining labor force participation.
- Current Economic Condition: Chief economist Mark Zandi of Moody's Analytics believes that the U.S. economy has already entered a recession, despite the National Bureau of Economic Research not yet confirming it, with the probability of recession rising to 48.6%, surpassing predictions from other organizations.
- Investment Strategy Recommendations: Investors should consider purchasing recession-proof stocks such as Walmart, AbbVie, and American States Water, which tend to perform well during economic downturns, while also maintaining cash reserves to capitalize on potential investment opportunities.
See More
Vicious Cycle Index Warns of U.S. Recession
- Recession Signal: The Vicious Cycle Index (VCI) has accurately predicted all U.S. recessions since 1945 and currently indicates that the U.S. economy is in the early stages of a recession, prompting investors to adjust their strategies based on this critical indicator.
- Unemployment Rate Changes: The VCI improves upon the Sahm Rule by adjusting unemployment data using a five-year moving average of labor force participation, signaling a recession when the average unemployment rate rises more than 1% over the previous 12 months, enhancing its accuracy.
- Investment Strategy Recommendations: With rising recession risks, investors are advised to increase cash positions and consider buying recession-resistant stocks such as Walmart, AbbVie, and American States Water, which are likely to maintain stable dividend payments during economic downturns.
- Declining Market Confidence: Consumer confidence hit a record low in April, and the labor force participation rate fell to 61.9%, indicating that more Americans are giving up on job searches; Moody's Analytics raised the probability of a recession in the next 12 months to 48.6%, surpassing other organizations' forecasts.
See More
American States Water Co. Q4 Earnings Report
- Earnings Performance: American States Water Co. reported a fourth-quarter net income of $28.74 million, translating to an earnings per share (EPS) of $0.74, which is a slight decrease from last year's $28.43 million and $0.75 EPS, indicating minor fluctuations in profitability.
- Revenue Growth: The company's revenue for the fourth quarter rose by 14.8% to $164.27 million from $143.09 million last year, demonstrating significant progress in market demand despite the decline in earnings.
- Financial Comparison: While net income showed a slight increase compared to the previous year, the drop in EPS reflects potential cost pressures impacting profitability, necessitating attention to future cost control strategies.
- Market Outlook: Despite the fluctuations in earnings, the substantial revenue growth may provide funding support for future investments and expansions, highlighting the company's ongoing growth potential in the water utility sector.
See More
Three Top Dividend Stocks on Wall Street
- Dividend Growth Leader: Realty Income has declared dividends for 667 consecutive months since its 1994 IPO and has increased its payout for 113 consecutive quarters, showcasing its robust cash flow and stable business model, which enhances investor confidence.
- Long-Term Stable Returns: American States Water has raised its annual dividend for 71 consecutive years, targeting a compound annual growth rate of over 7% for future dividends, with its monopoly position in the water and electricity sector ensuring stable demand and predictable earnings.
- Historic Dividend Payer: York Water has paid dividends for 209 consecutive years, making it one of the longest-standing dividend-paying companies in the U.S., with its stable cash flow and undervaluation attracting long-term investors' interest.
- Market Potential: York Water plans to apply for a significant rate increase from the Pennsylvania Public Utility Commission, which could boost its full-year revenue by 32%, further solidifying its market position in the water utility sector.
See More
Automatic Data Processing Expects $21.8 Billion Revenue, Continues 51-Year Dividend Growth
- Stable Revenue Source: Automatic Data Processing anticipates a revenue of $21.8 billion for the fiscal year, reflecting a 5.8% increase, which underscores its strong market position in payroll processing and tax reporting, enabling consistent dividends for shareholders.
- Dividend Growth Strength: The company has raised its per-share dividend for 51 consecutive years, with a forward-looking dividend yield of 2.6%, indicating its stable profitability and enhancing investor confidence in its long-term investment value.
- Walmart's Market Dominance: Walmart's stock price has surged 156% over the past three years, and while its current dividend yield is only 0.8%, its significant influence in the U.S. retail market and ongoing stock buyback programs create additional value for shareholders.
- Growth Potential in Water Sector: American States Water has increased its dividend for 70 consecutive years, with an average annual growth of over 8% in the past decade, and with rising water scarcity and electricity demand, its market performance is expected to continue outperforming the broader market.
See More
