Global Water Resources Inc. GWRS announced that its board of directors has increased its dividend by 1%. It has also declared a raised monthly cash dividend of 2.533 cents per share under its dividend policy. This compares with the previous quarter’s monthly cash dividend of 2.508 cents per share. The new dividend will be payable on Dec. 30, 2024, to stockholders of record as of Dec. 16, 2024.
This increased monthly dividend resulted in an annualized dividend of 30.396 cents per share compared with the previous level of 30.096 cents. The current dividend yield is 2.3%, higher than the Zacks S&P 500 composite's average of 1.19%.
Can GWRS Sustain Dividend Hikes?
Global Water Resources distributes more than 1 billion gallons of recycled water annually and has recycled over 17.4 billion gallons since 2004. The company is well-known for implementing Total Water Management (TWM). TWM is a holistic approach to water management that allows for intelligent management programs, including remote metering systems and other cutting-edge technologies, rate structures and incentives that deliver real energy savings.
The company has grown through its investments in new initiatives, acquisitions and organic expansion, which has led to exceptional performance and cash flow. Global Water Resources looks forward to increase its long-term investments in existing utilities to improve revenues, reduce expenses and build a rate base to provide safe, reliable services. During the third quarter of 2024, the company invested nearly $7 million in infrastructure projects to support existing utilities and continued growth.
GWRS continues to experience an increasing organic growth, evidenced by the company’s year-over-year organic surge in active connections (exclusive of acquisition-related growth) of 4.7% as of Sept. 30, 2024, compared with 2.6% in the year-earlier period.
GWRS’ growth prospects and ability to further enhance its performance indicate that management will have enough funds to sustain its shareholder-friendly initiatives in the future.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
In the past few months, Entergy Corporation ETR, IDACORP Inc. IDA and American States Water Company AWR have raised their quarterly dividend rate by 6.2%, 3.6% and 8.3%, respectively.
The Zacks Consensus Estimate for ETR’s 2024 earnings per share implies an improvement of 6.7% from the previous year’s level. ETR’s current dividend yield is 3.07%.
The Zacks Consensus Estimate for IDACORP’s 2024 EPS implies an improvement of 5.3% from the previous year’s level. IDA’s current dividend yield is 2.9%.
The Zacks Consensus Estimate for American States Water’s 2024 EPS implies an improvement of 6% from the previous year’s level. AWR’s current dividend yield is 2.18%.
GWRS’ Stock Price Performance
In the past three months, GWRS’ shares have risen 6.7% against the industry’s decline of 1.2%.
Image Source: Zacks Investment Research
GWRS’s Zacks Rank
Global Water Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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