Better Buy: American Water Works vs. Connecticut Water Service
U.S. water utilities American Water Works (NYSE: AWK) and Connecticut Water Service (NASDAQ: CTWS) both have dividend yields hovering around 2%. Their businesses, meanwhile, are roughly similar... Each helps ensure we have clean water to drink. But which one is the better buy? In this case, I think the winner is the utility with the shorter streak of annual dividend increases.
Connecticut Water Service has increased its dividend annually for 48 consecutive years. That's an incredible streak that few companies of any kind can claim to have achieved. But there's a couple of problems to think about.
For starters, the utility's annualized dividend growth over the past 10 years was just 2.7%. The number has been higher lately, with the trailing year increase at around 6%. But overall, mid single digits is probably the best you can hope for here based on historical trends. And a worst case scenario is low single digits, which might mean falling shy of inflation. If a dividend doesn't at least grow at around 3% annually, approximately the average for inflation, your buying power is shrinking. So, despite a long string of annual hikes, dividend growth isn't a huge selling point here.
Source: Fool.com
American Water Works Corp. Inc. Stock
With 7 Buy predictions and not the single Sell prediction the community is currently very high on American Water Works Corp. Inc..
As a result the target price of 132 € shows a slightly positive potential of 1.62% compared to the current price of 129.9 € for American Water Works Corp. Inc..
