Monday January 30, 2012
by Richard Band, editor Profitable InvestingIn the current environment, investors should focus any new stock purchases on companies with recession-resistant franchises and generous dividends -- such as water utilities.
At the moment, I’m keen on water utilities, which the crowd has left behind in the speculative fling of the past few weeks.
Water utilities offer an excellent combination of safety and yield. Two in particular,
American States Water (AWR) and
California Water Service (CWT), have raised their dividends, year after year, for decades.
What’s more, both of these pint-sized outfits carry a significantly lower price tag, in terms of estimated 2012 earnings, than some of the industry’s larger players.
That’s an invitation for a takeover bid, at perhaps a 15%–25% premium over today’s share price.
Buy CWT, a member of our Total Return Portfolio, at $19 or less. Its current yieldis 3.4%. AWR, also based in California and a member of our Incredible Dividend Machine portfolio, yields 3.1%. Pay up to $35.50.
Learn more about this financial newsletter at Richard Band's Profitable Investing.
