The board of directors of water utility American States Water Company (NYSE:AWR) was busy yesterday returning cash to shareholders, increasing its third-quarter dividend payment by 14% while simultaneously splitting the company's stock.

The board said it was raising the quarterly payout from $0.355 per share to $0.405 per share on Sept. 3 for shareholders of record as of Aug. 15. That's an annual increase of $0.20. This marks the 59th consecutive year American States Water has increased the dividend.

The stock split, which will also be paid Aug. 15 to shareholders of record Sept. 3, will have shareholders receive one additional share of American States' stock for each share they own on the record date.  the total number of common shares outstanding will increase from approximately 19.3 million to approximately 38.6 million.

Noting the stock split puts the stock price in a range attractive to more investors, American States Water CEO Robert J. Sprowls said: "This double-digit increase in our quarterly dividend and the stock split reflect our Board's confidence in the company's ability to continue to deliver solid results and its desire to have a payout ratio that is more in line with our peers."

The new dividend payment equates to a $1.62-per-share annual dividend yielding 3% based on the closing price of American States Water's stock on May 20.

AWR Dividend Chart

AWR Dividend data by YCharts. Chart does not reflect just-announced dividend increase.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.