With the consumer-price index rising 5.3% this August compared to last August, investors need to focus their attention on dividend stocks that can at least keep pace or exceed the rate of inflation with their dividend
Why Essential Utilities Remains A Buy
Summary
- Essential Utilities' non-GAAP EPS payout ratio will remain in the low-60% range this year, which is within its long-term payout target of 60% to 65%.
- WTRG grew its second-quarter revenue by 3.3% year over year while its non-GAAP EPS advanced 10.3% during that time.
- Balance sheet remains firmly investment grade with respective A and Baa2 credit ratings from S&P and Moody's.
- Essential Utilities is trading at a 6% premium to fair value, which is an acceptable premium to pay for a company of its quality.
- 2.3% dividend yield, 6-7% annual earnings growth, and 0.6% annual valuation multiple contraction offer investors a high likelihood of 8-9% annual total returns over the next decade.
Hi, my name is Kody. Aside from my articles here on Seeking Alpha, I am also a regular contributor to Sure Dividend, The Dividend Kings, and iREIT+Hoya Capital. I have been investing since September 2017 (age 20) and interested in dividend investing since about 2009.Since July 2018, I have ran Kody's Dividends. This is a blog that is documenting my journey towards financial independence using dividend growth investing as the means to transform the dream of financial independence into a reality. It's also the inspiration of my pseudonym here on Seeking Alpha.By God's grace, I owe everything to my blog for introducing me to the Seeking Alpha community as an analyst. That's my story and I hope you enjoy my work examining dividend growth stocks and the occasional growth stock!
Analyst’s Disclosure:I/we have a beneficial long position in the shares of WTRG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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