24th Nov 2019

Dividend stock of the week: The York Water Company (YORW)

Public utilities are the ultimate subscription business. They are like Netflix, but most of its subscribers cannot easily cancel the subscription because it provides them with the most necessary needs. Hence the public utility sector dividends are very stable. They may not have great price growth potential, but this is not our main focus, growth and compounding dividend yield is.

For our start, we picked a very interesting and small company. The York Water Company YORW. It will soon become a dividend aristocrat as it has 22 consecutive years of dividend increases. The current dividend yield is around 1.6 % percent, but there is more to it. YORW dividends are very stable in general. It pays them from the year 1816.

The small size of this company, long history and very good management (current ROE is 11 %) seems to indicate not only strong dividend growth but also stock price growth which is quite unique for a public utility company. Most analysts agree on a 1-year estimate of $53. For us, it seems like a very balanced and interesting stock that can bring more stability to any dividend portfolio.

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