The board of American States Water Company (NYSE:AWR) has announced that the dividend on 3rd of September will be increased to $0.4655, which will be 8.3% higher than last year’s payment of $0.43 which covered the same period. Even though the dividend went up, the yield is still quite low at only 2.0%.
Check out our latest analysis for American States Water
American States Water’s Payment Has Solid Earnings Coverage
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, American States Water was earning enough to cover the dividend, but it wasn’t generating any free cash flows. Since a dividend means the company is paying out cash to investors, this could prove to be a problem in the future.
Over the next year, EPS is forecast to expand by 16.3%. Assuming the dividend continues along recent trends, we…
