American Water Works

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American Water Works ( AWK), one of TheStreet Ratings' top-rated water utility stocks, is a good example of the idea that dividend stocks statistically provide better capital gains than their nonpaying brethren. Shares of this $5.2 billion water utility have rallied more than 16% year-to-date despite softness in the market.

While the 4.5% dividend hike declared last week makes AWK the smallest percentage-increase of the week, the company's current 3.13% yield makes the smaller increase more than justified.

As the country's largest public water utility, American Water Works is a unique way to get exposure to high-yielding utilities without any exposure to the energy business. The vast majority of AWK's operations are regulated legal monopolies -- the balance frankly aren't appealing enough for potential competitors to spend massive capital outlays on only to play second fiddle to American Water Works.

The capital outlays are a conspicuous element of AWK's balance sheet. Due to its sizable infrastructure network, the company carries a large debt load. While major obligations are a bit of a concern for shareholders, the company's cash flow generation skills and utility status mean that this name is a solid alternative for income investors looking to get away from the typical energy providers.

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