A Dividend King that’s relatively cheap, offers a 3%+ starting yield, and has historically raised its payouts faster than the official rate of inflation?

There actually seem to be quite a few stocks that fit that description.

However, today’s company is also a regulated water utility, giving it a wide moat and a geographic monopoly.

California Water Service Group ($CWT) is a regulated water utility that primarily serves California, though it has also expanded into other Western states, including Washington, New Mexico, Hawaii, and Texas.

The company has been in business for 100 years, paid 325 consecutive quarterly dividends, and raised its dividend for 59 consecutive years. It is also the largest regulated water utility in the western United States, providing service to more than 2.2 million people. Additionally, the stock screens cheap, especially compared to peers like American States Water Company and H2O America.

Right now, California Water Service Group trades at a price to earnings ratio of 17.74 while offering a 3.08% starting dividend yield, supported by a payout ratio of 61.75%.

California Water has also historically raised its dividend faster than inflation, with a 5-year compound annual dividend growth rate of 7.32%.

It’s also worth noting that the company increased its payout by 11.7% in January of this year.

It’s always good to see the most recent raise higher than the long-term average.

The biggest drawbacks to this stock are its heavy reliance on California, which exposes the company to risks such as droughts and political pressure. Additionally, California Water Service Group has been on a recent acquisition spree that has left it with a sizable debt load of roughly $1.7 billion against a market cap of approximately $2.6 billion.

Still, the payout ratio of approximately 62% provides a reasonable margin of safety, even if dividend growth slows because of headwinds or the need to reduce debt.

Water is essential, and water utilities generally benefit from predictable and stable cash flows. California Water Service Group has been in business since 1926, and the company has consistently raised its dividend every year for 59 consecutive years.

This is not the most exciting stock, but it is a reliable income investment.

With a PE ratio in the teens, a starting yield above 3%, and a payout ratio in the low 60s, I’d be interested in buying the stock for its dividend. While other water utilities have rallied, California Water Service Group still offers an attractive entry point with upside potential.

That’s not by picking the right stock or timing the market. It’s by holding three real asset classes in one strategy.

It’s anchored by an investment typically exclusive to billionaires.

Could be good timing too–

Bloomberg's Marcus Ashworth recently wrote, there’s "no more reliable safe havens."

The S&P, while hovering over 5 year highs, fell over 7% from the February peak. Bonds might carry less risk but they are barely keeping pace with inflation.

The things supposed to protect your portfolio started moving together.

Meanwhile, the world's wealthiest have been setting records in postwar and contemporary art.

After the dot-com bust, it grew roughly 24% annually for a decade. After 2008, roughly 11% annually for 12 years.

It trades globally in multiple currencies, has scarce supply, and has shown near-zero correlation to equities since 1995.*

Masterworks has helped 70,000+ investors allocate $1.3B fractionally across 500+ artworks featuring Banksy, Basquiat, and Picasso.

See if you can improve your portfolio performance in one diversified strategy.

Our subscribers skip the waitlist

^{*According to Masterworks data. Investing involves risk. Past performance is not indicative of future returns. Important Reg A disclosures: masterworks.com/cd}

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.