With 620 consecutive dividend payments, York Water (YORW +1.42%) has rewarded its shareholders with dividends for over two centuries. In light of this track record, it's unsurprising that the water utility is a staple of many conversations addressing reliable dividend stocks.
However, York Water's success in providing steady dividend payments since the early 1800s isn't distracting me from another water utility that I find even more compelling at the moment.
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What's the basis for York's steady stream of dividends?
Characterizing itself as the "oldest investor-owned water utility in the United States," York Water provides water and wastewater treatment to customers in southern and central Pennsylvania. Primarily, the company generates operating revenue from residential customers, which accounted for approximately 64% of overall revenue in 2024. Commercial and industrial customers are the second-greatest source, representing 29% in 2024.
NASDAQ: YORW
Key Data Points
As a regulated utility, York Water doesn't have the luxury of raising rates at will; however, the company is guaranteed a certain rate of return on its operations. To this end, the company files rate increase requests with the Pennsylvania Public Utility Commission. This contributes to the company generating steady cash flows, from which it can source its dividend payments.
I'd rather dip my toes in this water utility investment opportunity
While York Water may appeal to some investors, American States Water (AWR +3.21%) is a water utility stock that is shining more brightly on my radar at the moment.
NYSE: AWR
Key Data Points
Similar to York Water, American States Water (which operates primarily in California) also relies on its regulated businesses to provide the majority of its earnings. In 2024, for example, the company's regulated water business, Golden State Water Company, and its regulated electric utility, Bear Valley Electric Service, contributed 79.2% and 6.6%, respectively, to the company's 2024 consolidated earnings per share (EPS) of $3.17.
Since the majority of the company's operations stem from its regulated business, management enjoys excellent foresight into future cash flows, enabling it to plan accordingly for future capital expenditures, such as infrastructure upgrades, acquisitions, and dividends.
American States Water may have a shorter overall history of paying dividends compared to York Water, but that's just fine with me. Instead, American States Water distinguishes itself with a history of 71 consecutive years of raising its payout, a feat that places it at the very top of Dividend Kings, or companies that have hiked their payouts for at least 50 straight years.
Additionally, over the past 20 years, American States Water stock has delivered a better total return than that of York Water. Sure, there's no guarantee that the future will reflect the same dynamic as the past two decades, but American States Water's steadfast dedication to hiking its dividend is right up my alley as I consider passive income plays.
American States Water is the regal water choice for me
Boosting its dividend for 71 years demands respect, and accomplishing this puts water utility stock American States Water in a top spot among Dividend Kings -- an elite bunch of stocks that have raise dividends for at least 50 consecutive years. And that's just one of the many reasons I'd prefer to click the buy button on American States Water stock over York Water right now to quench my thirst for passive income.
