The Only New Stock I've Bought This Year Is the Perfect Addition Amid a Historically Pricey Stock Market

Earlier this month, the Dow Jones Industrial Average, S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite hit fresh all-time highs -- and stock valuations nearly followed suit. The second-priciest stock market in history has made it challenging to find a fundamentally attractive deal.

While I've selectively purchased shares of a few existing holdings this year, there's only one new stock I've added to my portfolio, and it's ideally positioned to succeed amid a historically pricey stock market: York Water (NASDAQ: YORW).

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Historical headwinds are mounting for Wall Street

Although "value" is subjective and varies from one investor to the next, the S&P 500's Shiller Price-to-Earnings (P/E) Ratio cuts through this subjectivity. The Shiller P/E, also known as the Cyclically Adjusted P/E Ratio (CAPE Ratio), is based on average inflation-adjusted earnings over the trailing decade.

When back-tested to January 1871, the S&P 500's Shiller P/E Ratio has averaged approximately 17.4. In early June, the CAPE Ratio for the current bull market peaked at 42.84, which is a stone's throw away from the all-time high of 44.19 that was established in December 1999, just months before the dot-com bubble burst.

Shiller PE Ratio is now just 3.5% away from passing the Dot Com Bubble as the most expensive stock market valuation in history 🚨🚨🚨 pic.twitter.com/1ceOa3yhfs

-- Barchart (@Barchart) June 1, 2026

History shows that Shiller P/E Ratios above 30 aren't sustainable over extended periods. While this valuation tool can't pinpoint when the music will stop for Wall Street, it does have an uncanny track record of foreshadowing significant downside. The previous five instances in which the CAPE Ratio exceeded 30 were all eventually followed by 20% or greater declines in the Dow, S&P 500, and/or Nasdaq Composite.

In other words, history points to a big-time correction or bear market in the presumed not-too-distant future.

Image source: Getty Images.

"Wall Street's Greatest Dividend Stock" makes for an ideal investment

Despite so few deals to be had in 2026, water and wastewater utility York Water caught my attention.

The beauty of water utilities is their predictability. Demand for water and wastewater services doesn't change much from year to year. Furthermore, most utilities operate as monopolies or duopolies in the areas they serve, meaning there's no concern about York losing its cash flow to competitors.

York Water operates as a reasonably small regulated utility in South-Central Pennsylvania. On the one hand, being regulated means it needs permission from the Pennsylvania Public Utility Commission (PPUC) to raise its customers' rates. Conversely, it protects York from unpredictable wholesale pricing, adding to the predictability of its cash flow.

In February, the PPUC granted York approval to raise rates to support $145 million in infrastructure investments. This rate hike is expected to boost annual revenue by $18.85 million, translating to a 24% increase from the $77.5 million reported in 2025.

But perhaps the most defining characteristic of this little-known water utility is its market-leading dividend. I've previously referred to York Water as "Wall Street's Greatest Dividend Stock" with good reason: it's paid a continuous dividend since 1816! Its 210-year streak of continuous payouts is approximately 60 years longer than any public company traded on U.S. exchanges.

To round things out, York Water stock is historically cheap. It's averaged a forward P/E ratio of 29.3 over the trailing half-decade, but is trading at just 17.1 times Wall Street's forecast earnings for 2027. If a historically pricey stock market rolls over, York Water is perfectly positioned to thrive.

Sean Williams has positions in York Water. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.