A few days ago, I said I was going to tell you about a company I was interested in, but not until I bought it (to avoid a stampede into the stock, giving me a big profit – hahahaha)
But things are getting so hinky in the stock market, I’ve decided to just sit things out and accumulate cash for the time being. So I’ll tell you the story of this stock – York Water Co., (YORW) which engages in impounding, purifying and distributing drinking water in Pennsylvania. HT: Capital Cube.
The steps in the decision-making are instructive:
- Read about YORW. Apparently, several financial people noticed that the company has paid dividends steadily since 1816! And no, that is not a typo!
- I decide to do my due diligence. Haven’t looked at the CEO, one of my usual checks. If they have gotten the CEO right for 200 years, who am I to disagree? However, I learned it is a water company that serves a huge variety of different industries, plus residences. This fits my Libertarian tendencies to declare that government is not necessary to supply vital services, private companies can do that just as well.
- Now, I checked dividends. They were 2.4% when I first started to look, but then something I really don’t like: the dividends are paid ANNUALLY. Not bad, if you don’t need steady monthly income. However, I decided to think it over.
- Then, Boom! Market started to go nuts. YORW, for example, now pays 2.52% since dropping in price from $26.67 to about $24.58. Some of the runup was due to people buying in advance of the annual dividend payment of $0.62 per share, the decline was due to panic in the streets. So, no buy.
A day or so ago, I started to think again about getting YORW. Today, Mr. Market has gone from a mild cold to pneumonia. Must have been the State of the Union address. Guess I’ll just keep waiting. But it’s good to have a couple of ideas ready to jump in, if you decide to. This is just one.