A Closer Look at Outperforming Water Utilities

With the official start of summer coming up on June 23, we decided to look at how water utilities stocks have fared as we enter into the hot summer months. Since Mid May, the Utilities Select Sector SPDR (XLU) is down as about 5.5 percent. We decided to delve further into it and see if could find companies outperforming the general trend in water utilities.

We wanted to find utility companies with a healthy, sustainable structure, so we limited our search to companies that pay at least a 2 percent dividend yield. After applying that criterion, we found six utility companies. Here are the six that are defying the trend and going up as we head into the summer:

Consolidated Water Company (CWCO): Consolidated leads the pack with a 5.66 percent gain this month and a 50 percent gain on the year, currently sitting at $11.01 a share. This Cayman Islands based desalinization company. Consolidated was spurred on by a healthy earnings report and a “buy” recommendation from Roth Capital.

York Water Company (YORW): The Pennsylvania-based water company, billed as “the oldest investor-owned utility company in the United States” posted a 3.06 percent gain this month, and a 15.58 percent gain this year to finish the day at $19.51. A bill to raise water rates $7.1 million in York’s coverage area – which would be a huge boon for York – is currently under consideration.

Middlesex Water Company (MSEX): Middlesex Water Company is up .92 percent this month, but 11.79 percent on the year. Zacks Investment Research just yesterday upgraded Middlesex to “outperform,” citing a $21.10 price objective (they currently sit at $19.80.) Middlesex services New Jersey, Delaware, and Pennsylvania.

San Jose Water Company (SJW): This California utility is up 1.26 percent this month and 3.85 percent this year.  Looking back further, though, SJW is up 18.49 percent from a year ago, and currently sits at $27.23 a share.

Connecticut Water Service (CTWS): Connecticut Water Service is almost flat year-to-date, only posting a .10 percent increase. But this month has seen a gain of 1.84 percent to finish up at 29.32.

American States Water (AWR): American States has been a big winner lately, posting a modest gain of .81 percent this month, but big gains of 15.53 percent this year-to-date and over 47 percent from a year ago. Just yesterday Forbes cited AWR as a Top Dividend Stock and expressed confidence in their multi-year projections and the sustainability of their high dividend yield (currently $1.62 a share.)