12-28-2017, 11:52 PM
(12-28-2017, 04:09 PM)divmenow Wrote: Hey Eric. Curious. Why AWK? I love the stock but its had such a great run so far for a utility. Why not a stock like D or AEP instead which has come down in price? Love all your other buys. Huge fan of NEE
I've been watching AWK for a couple years and it is always overvalued, and I have always avoided buying it because of that. In the meantime it has gone up another 50%+ and had a couple more 10% dividend raises. I just decided I didn't want to watch it anymore and decided to make the plunge and add it to the portfolio.
It's currently on the low end of its 50-60% payout ratio target and has raised the dividend at a 10% annual rate over the last 5 years. I think there's a good chance that continues going forward. I like the business it operates in, and also think the corporate tax cut should benefit it as it currently has an effective tax rate of ~40%.
I considered AEP as well, but purchased NEE instead to go along with D, WEC and XEL as my utility holdings.