Monday, May 9, 2011

Dividend Machine – The York Water Co. symbol YORW

                In the U.S. Sunday was mother’s day.  My mom, who worked at the water company in my home town used tell me to respect water.  Water is important, she would say, “water can cause enormous damage, yet without drinkable water, human life is not possible.  She went on to warn me that “they are not making any more of it.”  With those unbeatable market dynamics, ever growing demand and fixed supply, I decided to invest in a water company.

                Each Monday I profile a dividend machine for income investors to consider.   This week’s dividend machine is a water company.   The York Water Company, symbol YORW, makes a lot of money, EPS are $.71 per share.  These earnings are impressive when you realize the regulations that are imposed on the water industry.   York functions as a utility.  It is a small company but has a nice history.  

At Friday’s closing price of $16.76, YORW is very affordable.  The quarterly dividend is $.131 for a yield of 3.06%.  The dividend has increased every year for at least 5 years.  D/E, the final measure of a dividend machine is a respectable .93.  

This is a long term investment to consider if you need to diversify the portion of your income portfolio that is dedicated to utilities.  This company is strictly a dividend machine. If you can handle a yield of 3% that is ever increasing, consider YORW.  So far this cash flow strategy has produced ever increasing income and YORW may be a good fit.

Very Truly Yours,