Today’s Stock: Artesian Resources Corporation

They provide water, wastewater, and other services in Delaware, Maryland, and Pennsylvania. Founded in 1905 went public in 2000.

Another water sector dividend-paying stock, but not nearly as good as CWCO.

I’m down 12% on this position since I started buying shares in May 2024.

Taking another look at this business, I’m not sure why I bought shares in the first place. They have zero free cash flow, an ugly balance sheet, and they pay out dividends instead of paying off their debt.

What in the world is this company trying to do?

Since they’re a regional business, the room for growth is extremely limited. While the stock is cheap at a PE of 14, I’m not a fan of how they’re operating this water business.

At 34.7k (@ 90,332) sats per share, you’d get a yearly dividend of 1,385 sats, which would take 25 years to recoup your initial investment. After a second look, I’ll be dumping my shares and moving them into CWCO on Monday.

When Saylor discusses a business that is stagnant and resembles a zombie company, I think of companies like this one. While their offerings fulfill market needs, they lack a clear growth trajectory.

Consequently, they distribute dividends to maintain shareholder satisfaction, primarily from institutions like BlackRock, at a rate significantly below the yield of a 10-year Treasury bond. Additionally, with limited cash reserves, a 70% debt-to-equity ratio, and a few challenging quarters, they risk suspending dividend payments.

Unless their R&D department introduces a groundbreaking solution for water and wastewater treatment or leverages AI to enhance productivity and compete in other states for utility services, this company finds itself in a precarious position with zero free cash flow and no substantial growth prospects .

If I were the CEO, I would reduce the dividend and redirect some cash flows towards debt repayment and Bitcoin acquisition. However, the board’s age and reliance on leverage to operate the business and fund dividends make this an unlikely scenario. In my opinion, this business is not worth your investment.