American Water Works (AWK) Could Be a Great Choice

Company Overview - American Water Works (AWK) is a utilities stock headquartered in Camden, experiencing a price change of -9.33% year-to-date [2] - The company currently pays a dividend of $0.71 per share, resulting in a dividend yield of 2.36%, which is slightly below the Utility - Water Supply industry's yield of 2.39% and significantly above the S&P 500's yield of 1.57% [2] Dividend Performance - The annualized dividend of American Water Works is $2.83, reflecting a 1.9% increase from the previous year [2] - Over the past 5 years, the company has increased its dividend 5 times, achieving an average annual increase of 9.28% [2] - The current payout ratio stands at 58%, indicating that the company distributes 58% of its trailing 12-month earnings per share as dividends [2] Earnings Expectations - The Zacks Consensus Estimate for American Water Works' earnings in 2024 is projected at $5.20 per share, representing a year-over-year growth rate of 6.12% [3] Investment Considerations - Dividends are favored by investors for various reasons, including tax advantages and risk reduction in portfolios [4] - Larger, established companies are more likely to offer dividends compared to tech start-ups or high-growth businesses [4] - American Water Works is highlighted as a compelling investment opportunity due to its attractive dividend and a strong Zacks Rank of 2 (Buy) [4]