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Utilities are often well known for providing solid and consistent dividends; however, many investors are familiar with the electric and gas utilities. This article will take a closer look at Water Utilities that are publicly traded on U.S. exchanges. These companies primiarly have operations in the United States. This article will look at the following companies:
Ticker
Name
Market Cap ($ millions) July 5, 2011
Dividend Yield (%)
American Water Works
5,245
2.9
Aqua America, Inc.
3,084
2.8
California Water Service Group Holding
780
3.3
American States Water Company
654
3.2
SJW Corporation
456
2.8
Middlesex Water Company
295
3.9
Connecticut Water Service, Inc.
221
3.7
The York Water Company
213
3.1
Artesian Resources Corporation
139
4.2
Consolidated Water Co. Ltd.
139
3.1
Pennichuck Corporation
135
2.6
Source: Data provided by Zacks.com and downloaded on July 6, 2011.
Company Snapshots
Data is from Zacks.com and is current as of July 5, 2011.

American Water Works (NYSE: AWK)
- AWK has a market capitalization of $5.2 billion. AWK closed recently at $29.91 per share with a dividend yield of 2.94 percent. AWK shows a trailing P/E ratio of 18.7x which decreases compared to its forward P/E which is 17.6x. This suggests mild earnings per share growth. AWK just closed at $29.91 per share which is 49.3% above its 52-week low of $20.03 and 2.3% below its 52-week high of $30.61 per share. AWK has a low price- to-sales ratio at 1.9x. On an operating cash flow basis, AWK appears to be a good value with upside.

Aqua America, Inc. (NYSE: WTR) - WTR has a market capitalization of $3.1 billion. WTR closed recently at $22.31 per share with a dividend yield of 2.78 percent. WTR shows a trailing P/E ratio of 23.7x which decreases compared to its forward P/E which is 22.6x. This suggests mild earnings per share growth. WTR recently closed at $22.31 per share which is 27.1% above its 52-week low of $17.56 and 6% below its 52-week high of $23.65 per share. WTR has a high price to sales ratio at 4.2x. On an operating cash flow basis, WTR appears to have little upside improvement.

California Water Service Group Holding (NYSE: CWT) - CWT has a market capitalization of $779.5 million. CWT closed recently at $18.67 per share with a dividend yield of 3.29 percent. CWT shows a trailing P/E ratio of 21.2x which decreases compared to its forward P/E which is 17.7x. This suggests some earnings per share growth. CWT just closed at $18.67 per share which is 9.6% above its 52-week low of $17.03 and 2.8% below its 52-week high of $19.19 per share. CWT has a low price to sales ratio at 1.7x. On an operating cash flow basis, CWT appears to be a good value with upside.

American States Water Company (NYSE: AWR) - AWR has a market capitalization of $653.9 million. AWR closed recently at $35.04 per share with a dividend yield of 3.2 percent. This suggests mild earnings per share growth. AWR just closed at $35.04 per share which is 10.9% above its 52-week low of $31.6 and 8.8% below its 52-week high of $38.13 per share. AWR has a low price to sales ratio at 1.6x. On an operating cash flow basis, AWR appears to be a good value with upside.

SJW Corporation (NYSE: SJW) - SJW has a market capitalization of $455.7 million. SJW closed recently at $24.53 per share with a dividend yield of 2.81 percent. SJW shows a trailing P/E ratio of 30.3x which decreases compared to its forward P/E which is 24.7x. This suggests some earnings per share growth. SJW just closed at $24.53 per share which is 11.6% above its 52-week low of $21.99 and 13.7% below its 52-week high of $27.88 per share. SJW has a low price to sales ratio at 2.1x. On an operating cash flow basis, SJW appears to have little upside improvement.

Middlesex Water Company (NASDAQ: MSEX) - MSEX has a market capitalization of $295 million. MSEX closed recently at $18.92 per share with a dividend yield of 3.86 percent. MSEX shows a trailing P/E ratio of 18.9x which increases compared to its forward P/E which is 19.2x. This suggests an earnings decline. Its modest debt level appears to be manageable. MSEX just closed at $18.92 per share which is 20.7% above its 52-week low of $15.67 and 2% below its 52-week high of $19.29 per share. MSEX has a low price to sales ratio at 2.8x. On an operating cash flow basis, MSEX appears to have little upside improvement.

Connecticut Water Service, Inc. (NASDAQ: CTWS)
- CTWS has a market capitalization of $220.8 million. CTWS closed recently at $25.36 per share with a dividend yield of 3.67 percent. CTWS shows a trailing P/E ratio of 20x which decreases compared to its forward P/E which is 19x. This suggests mild earnings per share growth. Its modest debt level appears to be manageable. CTWS just closed at $25.36 per share which is 21.3% above its 52-week low of $20.91 and 11% below its 52-week high of $28.16 per share. CTWS has a medium price to sales ratio at 3x. On an operating cash flow basis, CTWS appears to have little upside improvement.

The York Water Company (NASDAQ: YORW) - YORW has a market capitalization of $212.9 million. YORW closed recently at $16.74 per share with a dividend yield of 3.13 percent. This suggests mild earnings per share growth. Its modest debt level appears to be manageable. YORW just closed at $16.74 per share which is 23.8% above its 52-week low of $13.52 and 7.3% below its 52-week high of $17.96 per share. YORW has a high price to sales ratio at 5.4x. On an operating cash flow basis, YORW appears to have little upside improvement.

Artesian Resources Corporation (NASDAQ: ARTNA) - ARTNA has a market capitalization of $139.3 million. ARTNA closed recently at $18.17 per share with a dividend yield of 4.19 percent. ARTNA shows a trailing P/E ratio of 19.8x which decreases compared to its forward P/E which is 18x. This suggests mild earnings per share growth. Its modest debt level appears to be manageable. ARTNA just closed at $18.17 per share which is 5% above its 52-week low of $17.31 and 9.6% below its 52-week high of $19.91 per share. ARTNA has a low price to sales ratio at 2.2x. On an operating cash flow basis, ARTNA appears to be a good value with upside.

Consolidated Water Co. Ltd. (NASDAQ: CWCO) - CWCO has a market capitalization of $139 million. CWCO closed recently at $9.55 per share with a dividend yield of 3.14 percent. CWCO shows a trailing P/E ratio of 26.5x which decreases compared to its forward P/E which is 20.5x. This suggests strong earnings per share growth. CWCO just closed at $9.55 per share which is 17.2% above its 52-week low of $8.15 and 27.6% below its 52-week high of $12.19 per share. CWCO has a low price to sales ratio at 2.8x. On an operating cash flow basis, CWCO appears to have little upside improvement.

Pennichuck Corporation (NASDAQ: PNNW) - PNNW has a market capitalization of $134.6 million. PNNW closed recently at $28.76 per share with a dividend yield of 2.57 percent. PNNW shows a trailing P/E ratio of 34.2x which increases compared to its forward P/E which is 36x. This suggests an earnings decline. PNNW just closed at $28.76 per share which is 30.9% above its 52-week low of $21.97 and 0% below its 52-week high of $28.77 per share. PNNW has a medium price to sales ratio at 3.6x. On an operating cash flow basis, PNNW appears to have little upside improvement.
Conclusion
Water utilities offer relatively attractive dividend yields. Among the approximately 100 Industries that Edgar segments publicly traded companies into, Water Utility industry had the 9th ranked industry average dividend.
There are substantially fewer Water Utility companies than other utilities since it is often a municipally provided services. Of the publicly traded companies reviewed, there were two large companies, AWK and WTR, and several other substantially smaller companies.
The best value was probably with AWK which had some of the lowest valuation multiples among all companies with just an 1.3 P/B price and a current P/E of 17.6. However, there was not substantial variation across all companies. Furthermore, AWK, has a significant debt burden. ARTNA offers the highest dividend yield at 4.2% but is more of a micro cap company with just a $139 million market capitalization. Many of the smaller water utilities are very thinly traded.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This article is for informational and educational purposes only and shall not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security.
Source: Seeking Solid Dividends With Water Utilities