Strategy

Utilities Companies That Can Make You Paper

There are many investing strategies out there in the financial world.  One such strategy is the dividend investing strategy. This strategy is very simple and entails buying and holding companies that pay good, quality dividends that will hopefully turn into passive income.  And if those companies are able to grow their dividends that outpace inflation over time, well that just means more passive income for you.   

Image result for Dividend Aristocrat

Case in point, prior to today, I didn’t know what a Dividend Aristocrat was. Nevertheless, a Dividend Aristocrats are companies that have increased their dividend payouts for 25 consecutive years or more.  They are the ‘best of the best’ dividend growth stocks.

This year, one of the strongest sectors have been Utilities.  During economic troubled times, Smart Money rotates into Utilities because they act like bonds, meaning the stock dividends are equivalent to coupon rates. Utilities are usually drowning in debt, but during economic troubled times, interest rates go down, so debt obligations put less of a strain on cash flow and more cash flow means consistent payouts of dividends. And because the barriers of entry are tough in the Utilities sector, so with little competition and residual income, dividends are payout out consistently.

So if Dividend Aristocrats are companies that have increased their dividend payouts for 25 consecutive years or more, what do you call companies that have paid dividends for over 100 straight years?  I have no idea, but if you know, let me know in the comment section. Nevertheless, here are three "whatever you want to call them" Utilities companies that have paid out dividends for over 100 years.

York Water (NASDAQ:YORW)

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The York Water Company impounds, purifies, and distributes drinking water.  It serves customers in 39 municipalities within York County and 9 municipalities within Adams County, Pennsylvania. The company serves various customers in the fixtures and furniture, electrical machinery, food product, paper, ordnance unit, textile product, air conditioning system, laundry detergent, barbell, and motorcycle industries.  This leads to relatively predictable cash flow, thereby allowing management to ensure that costs don't outpace revenue. York Water has an incredible streak going of paying out a dividend to investors for 203 consecutive years.

Consolidated Edison (NYSE:ED)

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Consolidated Edison, Inc., through its subsidiaries, engages in regulated electric, gas, and steam delivery businesses in the United States. The company offers electric services to approximately 3.5 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,622 customers in parts of Manhattan.

Demand for these products tends to remain relatively consistent and predictable, allowing Con Ed, as the company is known, to forecast its spending and cash flow with confidence. Consolidated Edison has an incredible streak going of paying out a dividend to investors for 134 consecutive years.

UGI Corp. (NYSE:UGI)

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UGI Corporation distributes, stores, transports, and markets energy products and related services in the United States and internationally. The company operates through four segments: AmeriGas Propane, UGI International, Midstream & Marketing, and UGI Utilities. It distributes propane to approximately 1.7 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers through 1,900 propane distribution locations; and sells, installs, and services propane appliances, including heating systems and propane-powered generators. 

Further, the company distributes natural gas to approximately 642,000 customers in the portions of 44 eastern and central Pennsylvania counties through its distribution system of 12,300 miles of gas mains; and supplies electricity to approximately 62,000 customers in northeastern Pennsylvania through 2,200 miles of lines and 13 substations. UGI Corporation has an incredible streak going of paying out a dividend to investors for 134 consecutive years.

In the investing world, quick money could lead you to the poor house, at times it great to be the turtle in the race.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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