A Lifetime of Passive Income Is Hiding in Plain Sight With This ETF and These 2 No-Brainer Dividend Kings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 04 2024
0mins
Source: NASDAQ.COM
Stock Market Performance: The S&P 500 and Nasdaq Composite have both risen over 20% in 2024, but new investors may find it challenging to enter the market without overpaying; however, there are still valuable dividend-paying stocks like PepsiCo and American States Water available.
Investment Opportunities: PepsiCo is highlighted for its reliable dividends despite recent underperformance, while American States Water boasts a long history of dividend increases and stable earnings growth, making them attractive options for passive income. Additionally, the Global X SuperDividend ETF offers diversification in high-yield equities with a current yield of 6.1%.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy AWR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on AWR
About AWR
American States Water Company is a holding company. Its segments include water, electric and contracted services. Within the segments, the Company has three principal business units: water and electric service utility operations conducted through its regulated utilities, Golden State Water Company (GSWC) and Bear Valley Electric Service, Inc. (BVES), respectively, and contracted services conducted through American States Utility Services, Inc. (ASUS) and its subsidiaries. GSWC is a public water utility engaged in the purchase, production, distribution and sale of water in 11 counties in the state of California and provides wastewater collection and treatment services. BVES is a public electric utility that distributes electricity in several San Bernardino County Mountain communities in California. ASUS operates, maintains and performs construction activities (including renewal and replacement capital work) on water and/or wastewater systems at various United States military bases.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
American States Water Raises Dividend for 71 Consecutive Years
- Stable Dividend Growth: American States Water (AWR) has raised its dividend for 71 consecutive years with an 8.5% CAGR, supported by a sub-60% payout ratio, showcasing strong profitability and stability that attracts income-focused investors.
- Outperforming Industry Benchmark: AWR's stock has risen 15.46% year-to-date, significantly outperforming the utility ETF XLU's 9.66%, driven by a compounding $1.67 billion rate base and 50-year military base contracts, enhancing market confidence.
- Board Share Purchases: Nine directors coordinated a share purchase at $75.92 in May 2026, demonstrating confidence in the company's future, while a completed $200 million equity offering eliminates dilution risk through 2029, further solidifying shareholder value.
- Strong Financial Health: AWR's debt-to-equity ratio stands at 0.87, with EBITDA stable at $263 million, and operating cash flow reaching $71.6 million in Q1 2026, indicating the company's ability to maintain a healthy financial position despite capital expenditure pressures.
See More
Valuation Analysis of U.S. Mid-Cap Utility Stocks
- Valuation Comparison: According to Seeking Alpha's valuation grade, Ormat, TransAlta, and Chesapeake Utilities are among the least attractively valued companies relative to their sector peers, indicating a competitive disadvantage in the industry.
- Valuation Metrics: This rating is based on various valuation metrics, including P/E, PEG, EV/Sales, and EV/EBITDA, reflecting poor market performance that could undermine investor confidence.
- Ormat's Outlook: Ormat Technologies projects 2026 revenues between $1.11 billion and $1.16 billion, and despite its high valuation, it is advancing 2-4 MW enhanced geothermal system pilot projects, demonstrating a focus on future growth.
- Market Reaction: Due to these companies' valuation disadvantages, investors may reassess their portfolios, leading to stock price volatility and impacting overall market sentiment.
See More
Updated Quant Ratings for Mid-Cap Utilities Post Earnings Season
- Strong Buy Ratings: Enel Chile S.A. (ENIC) received a strong buy rating of 4.60, indicating robust performance in profitability and growth, which is likely to attract more investor interest and enhance its market value.
- Buy Rated Companies: Northwest Natural Holding Company (NWN) and American States Water Company (AWR) achieved buy ratings of 4.28 and 4.26 respectively, reflecting their competitiveness and stability in the market, potentially driving their stock prices higher.
- Low Quant Ratings: NorthWestern Energy Group (NWE) and National Fuel Gas Company (NFG) received sell ratings of 2.39 and 2.34, indicating weak fundamentals that may lead to declining investor confidence and negatively impact their stock performance.
- Future Outlook: Chesapeake Utilities Corporation (CPK) targets an EPS of $7.75 to $8.00 by 2028, despite a projected decline of about $0.10 in 2026 EPS due to WRU delays, its 22-year streak of dividend increases is expected to attract long-term investors.
See More
American States Water Reports Strong Q1 2026 Earnings Growth
- Strong Financial Performance: In Q1 2026, American States Water reported consolidated earnings per share of $0.76, an 8.6% increase from $0.70 in the same quarter of 2025, indicating robust growth in its water and electric utility sectors, which enhances investor confidence.
- Infrastructure Investment Plans: The company plans to invest between $185 million and $225 million in infrastructure improvements throughout 2026, aimed at enhancing the long-term service capabilities of its water and electric systems, thereby ensuring customer satisfaction and market competitiveness.
- Future Earnings Projections: ASUS is projected to contribute between $0.63 and $0.67 per share for 2026, reflecting the company's optimistic outlook on future earnings and indicating its sustained competitiveness in the market.
- Regulatory Case Developments: The company filed a new electric general rate case in January and plans to submit a water rate case in July covering 2028 to 2030, demonstrating proactive regulatory compliance efforts aimed at ensuring future revenue stability.
See More
AWR Q1 2026 Earnings Call Transcript
See More
American States Water Q1 Earnings Report
- Earnings Performance: American States Water reported Q1 GAAP EPS of $0.76, missing expectations by $0.01, indicating slightly lower profitability than market forecasts, which may affect investor confidence.
- Revenue Growth: The company achieved Q1 revenue of $169.19 million, a 14.3% year-over-year increase, exceeding market expectations by $12.17 million, demonstrating sustained demand in the water services sector and enhancing future growth potential.
- Contracted Services Contribution: AWR's contracted services business is projected to contribute between $0.63 and $0.67 per share for the full year 2026, indicating stability in long-term contracts that could bolster future profitability.
- Dividend Declaration: American States Water declared a dividend of $0.504 per share, reflecting the company's commitment to shareholder returns, which may attract investors seeking stable income.
See More
American States Water Raises Dividend for 71 Consecutive Years
- Stable Dividend Growth: American States Water (AWR) has raised its dividend for 71 consecutive years with an 8.5% CAGR, supported by a sub-60% payout ratio, showcasing strong profitability and stability that attracts income-focused investors.
- Outperforming Industry Benchmark: AWR's stock has risen 15.46% year-to-date, significantly outperforming the utility ETF XLU's 9.66%, driven by a compounding $1.67 billion rate base and 50-year military base contracts, enhancing market confidence.
- Board Share Purchases: Nine directors coordinated a share purchase at $75.92 in May 2026, demonstrating confidence in the company's future, while a completed $200 million equity offering eliminates dilution risk through 2029, further solidifying shareholder value.
- Strong Financial Health: AWR's debt-to-equity ratio stands at 0.87, with EBITDA stable at $263 million, and operating cash flow reaching $71.6 million in Q1 2026, indicating the company's ability to maintain a healthy financial position despite capital expenditure pressures.
See More
Valuation Analysis of U.S. Mid-Cap Utility Stocks
- Valuation Comparison: According to Seeking Alpha's valuation grade, Ormat, TransAlta, and Chesapeake Utilities are among the least attractively valued companies relative to their sector peers, indicating a competitive disadvantage in the industry.
- Valuation Metrics: This rating is based on various valuation metrics, including P/E, PEG, EV/Sales, and EV/EBITDA, reflecting poor market performance that could undermine investor confidence.
- Ormat's Outlook: Ormat Technologies projects 2026 revenues between $1.11 billion and $1.16 billion, and despite its high valuation, it is advancing 2-4 MW enhanced geothermal system pilot projects, demonstrating a focus on future growth.
- Market Reaction: Due to these companies' valuation disadvantages, investors may reassess their portfolios, leading to stock price volatility and impacting overall market sentiment.
See More
Updated Quant Ratings for Mid-Cap Utilities Post Earnings Season
- Strong Buy Ratings: Enel Chile S.A. (ENIC) received a strong buy rating of 4.60, indicating robust performance in profitability and growth, which is likely to attract more investor interest and enhance its market value.
- Buy Rated Companies: Northwest Natural Holding Company (NWN) and American States Water Company (AWR) achieved buy ratings of 4.28 and 4.26 respectively, reflecting their competitiveness and stability in the market, potentially driving their stock prices higher.
- Low Quant Ratings: NorthWestern Energy Group (NWE) and National Fuel Gas Company (NFG) received sell ratings of 2.39 and 2.34, indicating weak fundamentals that may lead to declining investor confidence and negatively impact their stock performance.
- Future Outlook: Chesapeake Utilities Corporation (CPK) targets an EPS of $7.75 to $8.00 by 2028, despite a projected decline of about $0.10 in 2026 EPS due to WRU delays, its 22-year streak of dividend increases is expected to attract long-term investors.
See More
American States Water Reports Strong Q1 2026 Earnings Growth
- Strong Financial Performance: In Q1 2026, American States Water reported consolidated earnings per share of $0.76, an 8.6% increase from $0.70 in the same quarter of 2025, indicating robust growth in its water and electric utility sectors, which enhances investor confidence.
- Infrastructure Investment Plans: The company plans to invest between $185 million and $225 million in infrastructure improvements throughout 2026, aimed at enhancing the long-term service capabilities of its water and electric systems, thereby ensuring customer satisfaction and market competitiveness.
- Future Earnings Projections: ASUS is projected to contribute between $0.63 and $0.67 per share for 2026, reflecting the company's optimistic outlook on future earnings and indicating its sustained competitiveness in the market.
- Regulatory Case Developments: The company filed a new electric general rate case in January and plans to submit a water rate case in July covering 2028 to 2030, demonstrating proactive regulatory compliance efforts aimed at ensuring future revenue stability.
See More
AWR Q1 2026 Earnings Call Transcript
See More
American States Water Q1 Earnings Report
- Earnings Performance: American States Water reported Q1 GAAP EPS of $0.76, missing expectations by $0.01, indicating slightly lower profitability than market forecasts, which may affect investor confidence.
- Revenue Growth: The company achieved Q1 revenue of $169.19 million, a 14.3% year-over-year increase, exceeding market expectations by $12.17 million, demonstrating sustained demand in the water services sector and enhancing future growth potential.
- Contracted Services Contribution: AWR's contracted services business is projected to contribute between $0.63 and $0.67 per share for the full year 2026, indicating stability in long-term contracts that could bolster future profitability.
- Dividend Declaration: American States Water declared a dividend of $0.504 per share, reflecting the company's commitment to shareholder returns, which may attract investors seeking stable income.
See More
