Monthly Dividend Stocks: Global Water Resources, Inc. (NASDAQ:GWRS)
By: Ned Piplovic,
Investors interested in monthly dividend stocks should consider Global Water Resources (NASDAQ:GWRS), which offers above-average yields and double-digit-percentage one-year total returns.
The repetitive nature of frequent dividend distributions forces monthly dividend stocks to stick to a strict and predetermined schedule of the dividend distribution cycle. As a monthly paying dividend stock, Global Water Resources follows a similar routine. Effectively, the company has an important dividend event every two weeks.
The company’s ex-dividends dates occur mid-month — generally between the 12th and the 16th day of the month. All investors that wish to receive the dividend distribution for that period must claim stock ownership before the ex-dividend date. Stock ownership before the ex-dividend date bestows a shareholder of record designation to investors. All shareholders of record are eligible and will receive a dividend distribution on the subsequent pay date at the end of that month. So far, Global Water Resources’ earliest pay date occurred on the 28th day of the month.
Global Water Resources (NASDAQ:GWRS)
Based in Phoenix and founded in 2003, Global Water Resources, Inc. is a water resource management company. The company owns, operates and manages water, wastewater and reclaimed and recycled water utilities in strategically located communities, mainly in the Phoenix metropolitan area. Global Water Resources manages its resources and provides services through 12 wholly owned subsidiaries — Global Water: Santa Cruz Water Company; Global Water: Palo Verde Utilities Company, Water Utility of Greater Tonopah, Water Utility of Northern Scottsdale, Eagletail Water Company, Global Water: Turner Ranches Irrigation, LLC, Global Water: Red Rock Utilities, LLC, Balterra Sewer, Hassayampa Utility Company, CP Water Company, Global Water: Picacho Cove Water Company and Global Water: Picacho Cove Utilities Company. The company’s Total Water Management system includes management of the entire water cycle through ownership and operation of the entire water stream. This includes fresh water, wastewater and recycled water utilities within the same geographic areas. Through the full ownership and control of the entire supply chain, the company can maximize water conservation and usage efficiency. Global Water Resources’ conservation and efficient management approach is especially important in areas that face water supply scarcity, such as in Arizona.
Monthly Dividend Stocks: Global Water Resources Dividends
Global Water Resources began dividend distributions in May 2016. Over the past three years, the company has enhanced its total annual dividend distribution amount 20%. While that might seem low compared to other monthly dividend stocks, this growth occurred over a very short time frame. The average growth rate of 6.1% per year over the past three years is comparable to many high-growth monthly dividend stocks.
The current $0.0239 monthly payout amount corresponds to a $0.287 annualized dividend distribution. At the current share price level, this annual payout amount is equivalent to a 2.82% forward dividend yield, which is only slightly below the company’s own 3.03% yield average since dividend inception in early 2016.
While trailing its own average yield slightly, Global Water Resources’ current yield outperformed the 2.02% simple average yield of the entire Utilities sector by 47%. Furthermore, Global Water Resources’ current yield is the highest yield among the company’s peers in the Water Utilities industry segment. As such, Global Water Resources’ current yield is nearly two-thirds higher than the 1.79% average yield of all the companies in the segment. Furthermore, Global Water Resources’ 3% yield is also more than 50% above the 1.97% average yield of the segment’s only dividend paying companies.
Monthly Dividend Stocks: Global Water Resources Share Price
While experiencing some overall volatility, the share price delivered a strong growth over the past few years. The trailing 12-month period brought additional volatility and a flat performance since the beginning of the year. However, the share price has been on steady uptrend since reaching its 52-week low in February 2018.
Riding an uptrend from early 2018, the share price achieved its new all-time high by mid-August 2018, just six weeks into the trailing 12-month period. The share price continued rising and setting new highs until the price reached its most recent all-time high of $11.38 on November 1, 2018.
Unfortunately, a missed earnings expectation in the third quarter and downward pressure from the overall market correction in late 2018 drove the share price into significant pullback. By early February 2019 the share price shed more than 20% of its November-peak value. The share price gave back all its gains since the beginning of the trailing 12-month period by the beginning of February. Moreover, the share price lost another 5% before reaching its 52-week low of $9.02 on February 7, 2019.
However, after bottoming out in early February, the share price reversed trend and already has recovered half of its losses since the November peak. Except for a one-day spike in March, June was the first time since early January 2019 that the share price closed above the $10 mark in more than one trading session. Actually, the share price has now closed above the $10 level in the past 15 consecutive trading sessions. However, despite three separate attempts in the second half of June, the share price failed to break through the current $10.50 resistance level.
The share price closed at the end of trading on July 1, 2019, at $10.15. While still more than 10% below the all-time high from the beginning of November 2018, this closing price was 7.2% higher than it was at the beginning of the trailing 12-month period last July, as well as 12.5% above the 52-week low from early February 2019. Furthermore, the July 1 closing price is nearly 60% higher than it was when the company started dividend distributions in May 2016.
Despite a share price pullback in late 2018, the price recovery combined with dividend income payouts to reward shareholders with a 14% total return on investment over the trailing 12 months. The three-year total return is 38%. However, the total return since the dividend inception is nearly 85% and dividend income contributed 30% of those gains.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.