Financially, there's also a lot to like about LinkedIn. The firm has a debt-free balance sheet with almost $700 million in cash in its coffers. That hefty war chest gives management ample dry powder to keep growth engines spinning -- and it means that the firm is more easily able to ride out economic hiccups without putting value destroyers like share issuances or debt building on the table. With rising analyst sentiment in LinkedIn this week, we're betting on shares...
American Water Works Co.
Sometimes, the best performance comes from the most boring companies.
American Water Works
(AWK - Get Report)
is a perfect example of that. The $7 billion firm is one of the largest public water utilities in the world, providing water service and wastewater to around 15 million U.S. and Canadian consumers. So far this year, shares of AWK have rallied almost 22% -- and that's on top of the firm's 2.7% dividend yield.
Like other utilities, American Water Works enjoys a government-sanctioned monopoly in most of its markets. The firm's water and sewage pipe infrastructure isn't replicable, and arrangements made with municipalities help to insulate the firm from the costs of maintaining them. Not all of AWK's revenues come from regulated businesses -- the firm also has a lucrative business using its expertise to design and build facilities for others, mainly municipalities and larger industrial operations. That nonregulated arm provides some nice diversification for the firm in places where it doesn't have a presence as a utility.
Not surprisingly, AWK is a favorite for income investors. The firm's dividend yield has diminished as its share price has climbed, but the uniqueness of the AWK's offering should keep investors interested in this stock. Still, at current levels, the 2.7% yield is a worthwhile payout for a secondary-income holding.
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