Wall Street's biggest dividend stock — a small-cap company that 99 percent of investors have never heard of — is the cheapest it's been in more than a decade.

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Arguably the greatest aspect of making money on Wall Street is that there are countless ways to grow your wealth. With thousands of publicly traded stocks and exchange-traded funds (ETFs) to choose from, there are many ways to meet your investment goals.

But among these many strategies, it’s hard to forget how successful buying and selling high quality is. Divided shares It’s been a long time.

Companies that pay regular dividends are almost always consistently profitable and can often offer clear long-term growth prospects. After all, they have historically outperformed non-payers for a long time.

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Last year, researchers from The Hartford Fund, in collaboration with Ned Davis Research, updated the data from their report. The power of division: past, present and future. This report compares the performance of dividend-paying companies to non-dividend-paying companies over half a century (1973-2023).

That’s what The Hartford Fund and Ned Davis Research found. Income stocks have more than doubled the average annual return of non-paying investors. — 9.17% compared to 4.27% — and did so while being less volatile than the benchmark. S&P 500.

However, high quality dividend stocks do not grow on trees and investors need some effort to find them.

More than 1,000 stocks currently pay dividends, but only a small percentage of these companies have been paying dividends and/or raising their payouts over a long period of time.

For example, the health care collection Johnson and Johnson (NYSE:JNJ) It has increased its base annual payment to Series A 62 and is one of only two publicly traded companies with a credit rating of AAA from Standard and Poor’s High Demand. The company’s high-margin novel-drugs division, combined with its perfectly positioned medical technologies division, make it one of the most reliable dividend stocks on the planet.

Goliath of consumer goods Proctor and gambling (NYSE:PG) It offers an even longer period of time to increase the base annuity: 68 years (and counting). Having a portfolio of household and personal products with multiple brands such as Crate, Tide, Charmin, Gillette and Pampers ensures steady cash flow in any economic climate.

Although only a few dozen companies have raised their base annual payouts for 50 or more consecutive years (the Dividend Kings), more than a dozen publicly traded companies have paid annual dividends for more than 100 years in a row.

Integrated oil and gas giant ExxonMobil and power equipment manufacturer Stanley Black and Decker Since 1882 and 1876, they have had uninterrupted dividends.

However, there is one unknown dividend stock whose payout frequency is more impressive than any of these brand name businesses.

A drop of water falling from an outdoor well at sunrise. — Image source: Getty Images

Although it may not have high yields, Wall Street’s biggest dividend is small-cap water utilities. York Water (NASDAQ: YORW).

The reason most investors don’t know about York Water is because it’s so small in so many ways. America’s oldest investor-owned utility provides water and sewer service to 56 municipalities spanning four counties in south-central Pennsylvania.

In total, the company serves more than 300,000 people. In comparison, American water It has 14 million water and wastewater customers in 24 states.

American Water has a market capitalization of approximately $25 billion and sees more than 1.15 million shares trade daily. York Water has a relatively modest market cap of $453 million and an average daily volume of 55,000 shares.

But what York lacks in visibility he more than makes up for with his pay. In the year It has been paying consistent dividends since its inception in 1816 — that is, since our fourth president, James Madison, was in the White House. York’s 208-year payout streak is six decades longer than Stanley Black & Decker’s and coca cola (From 1920)

One of the reasons income investors can count on York to deliver year-over-year is because it offers fundamental demand. Demand for water and wastewater services does not change much from one year to the next, resulting in highly predictable operating cash flows.

To build on this point, most utilities (water, electricity and gas) operate as monopolies or duopolies in the areas they serve. Finding the infrastructure needed to meet the needs of homeowners and businesses is incredibly expensive and time-consuming. This lack of competition makes York’s cash flow more predictable.

To stay with the theme, York Water is a regulated utility. That means it needs approval from the Pennsylvania Public Utilities Commission before rates can go up on customers. Although this may sound like a nuisance, it is actually very important as it prevents the company from dealing with unpredictable wholesale prices.

The utility makes regular bolt purchases to expand its reach. With all aspects of cash flow highly transparent, management can grow the company organically without compromising profits or its more than two-century legacy.

In addition to paying dividends for 208 consecutive years and increasing its initial annual payout for the past 28 years, York Water’s stock is historically cheap. Shares are valued at 20 times consensus earnings per share for 2025. It has been more than a decade since the price-to-earnings ratio (P/E) dipped below this level.

Finally, the utility’s 2.8% yield matched its highest point in the past nine years. Since the start of this century, its total return, including dividends, is 996 percent, better than the S&P 500’s total return of 547 percent over the same period.

In short, the only reason York’s yield isn’t increasing is because the stock price is so much higher than the broader market. Investors are not complaining.

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Shawn Williams It has no place in the said shares. The Motley Fool recommends Johnson & Johnson. The Motley Fool has Disclosure Policy.

Wall Street’s biggest dividend stock — a small-cap company 99 percent of investors have never heard of — is the cheapest it’s been in more than a decade Originally published by The Motley Fool.