There is no shortage of ways to make money on Wall Street, but few have proven more successful than buying and holding high-quality dividend stocks. In "The Power of Dividends: Past, Present, and Future," the analysts at Hartford Funds, in collaboration with Ned Davis Research, found that dividend payers more than doubled the average annual return of non-payers over 52 years (9.2% annualized vs. 4.21% annualized, from 1973-2025).
But it's not always about the almighty yield. Some of Wall Street's safest and greatest income stocks offer modest yields and exceptional value. That's why I took the plunge and opened a position in what I've dubbed "Wall Street's Greatest Dividend Stock," York Water (YORW +1.51%).
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York Water shares have been nearly halved over the last five years
To be upfront, the last five years haven't been pleasant for York's investors. Its shares are down by 44% over the trailing five-year period, ending April 30, 2026, and are closing in on a 50% decline from their intra-day high since May 2021.
Several factors have weighed on York Water's stock, but also paved the way for opportunistic investors to pounce, which I'll touch on more later.
For starters, utilities have mostly been left in the dust by Wall Street's tech-driven rally. Although select utilities are benefiting from the expectation that artificial intelligence data centers will boost electricity demand, safe, time-tested utilities simply aren't going to excite investors when the stock market is moving up in a parabolic fashion.
US Inflation Rate data by YCharts.
Another issue for utilities is that inflation soared in 2022, prompting the Federal Reserve to raise interest rates aggressively. In addition to higher borrowing costs (utilities often rely on debt to finance major projects), rapidly rising yields made U.S. Treasury bonds attractive to income seekers. When Treasury bond yields touch 5% or above, it's not uncommon for investors to opt for their safety, as opposed to investing in dividend stocks where their principal isn't protected.
More specific to York Water, it was trading at quite a premium in 2021. Its trailing 12-month price-to-earnings (P/E) ratio was above 40 in an industry that traditionally sees P/E ratios hover around 25.
Lastly, the company announced, priced, and closed a public offering of around 1.52 million shares of its common stock at $28.50 in April 2026. Issuing shares at a notable discount to the prior-day close resulted in York's stock hitting an eight-year, intra-day low.
Although it's been a bumpy ride over the last five years for York's shareholders, the time to pounce has arrived.
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Say hello to "Wall Street's Greatest Dividend Stock"
York Water is a water and wastewater utility servicing just 58 municipalities in four counties in South-Central Pennsylvania. At a market cap of $470 million, it's easily overlooked by more than 99% of investors.
But this little-known utility packs a punch and offers a range of competitive advantages.
Arguably, the No. 1 selling point for York Water is its dividend. While its yield of 3.1% might sound pedestrian, it's the safety behind this payout that helps it stand out from the pack. York has been paying a continuous dividend since 1816!
To put this into perspective, York has paid a dividend to its shareholders under all but three U.S. presidents. The next-closest company is Stanley Black & Decker, and its continuous dividend streak trails York by a full 60 years. When it comes to income stability, York has earned the title of Wall Street's Greatest Dividend Stock.
NASDAQ: YORW
Key Data Points
One of the reasons it's been able to pay a continuous dividend for over two centuries is the predictability of water and wastewater demand. Water service is a basic necessity if you rent or own a home, and demand for York's services doesn't change much from one year to the next.
Furthermore, most utilities act as monopolies or duopolies in the areas they serve. The prohibitively high costs of water infrastructure mean York doesn't have to worry about losing its customers to other water and wastewater companies. In other words, cash flow from its operations tends to be highly predictable.
Cash flow predictability for utilities (of all forms) is incredibly important. Being able to accurately forecast cash flow one or more years into the future allows management teams to deploy capital for new projects and/or acquisitions without demonstrably impairing profits. York Water's management team has maintained a steady diet of bolt-on acquisitions to expand the company's reach and grow its bottom line.
Another reason the arrow is pointing up for York Water is its status as a regulated utility. Regulated utilities require permission from a state's public utility commission before rate hikes can be passed along to customers.
YORW Cash from Operations (Annual) data by YCharts.
Though this might sound like bad news, it's actually great news from a cash flow perspective. Being regulated ensures that York doesn't deal with unpredictable wholesale pricing. In February, the Pennsylvania Public Utility Commission gave York the green light to increase rates on its water and wastewater customers. This rate hike is forecast to boost annual revenue by $18.85 million, or 24%, based on its total revenue from 2025.
Lastly, the valuation now makes sense. Based on analysts' estimates, York is trading at less than 18 times forecast earnings per share (EPS) in 2026 and roughly 16 times projected EPS in 2027. That's well below the industry average P/E ratio for water utilities and represents a 44% discount to its average forward P/E ratio over the trailing five years.
York Water stock hasn't been this cheap in a quarter-century, which is all the encouragement I needed to finally open a position in Wall Street's Greatest Dividend Stock.
