Wall Street's Greatest Dividend Stock Makes for a Screaming Buy in September -- and It's a Company 99% of Investors Have Likely Never Heard of Before

Key Points

• Dividend stocks have more than doubled the average annual return of non-payers over the previous 51 years.

• Though dividends are commonplace, some dividend groupings are exceptionally rare, such as the roughly two dozen companies that have paid a continuous dividend for at least a century.

• An under-the-radar utility that's been paying a continuous dividend for 209 years is historically cheap and capable of delivering highly predictable sales, cash flow, and profits, year after year.

• 10 stocks we like better than York Water ›

For well over a century, Wall Street has been a stomping ground for wealth creation. Though real estate, commodities, and bonds have generated positive nominal returns for investors over time, no other asset class has come particularly close to matching the average annual return of stocks.

According to an analysis from Crestmont Research, the S&P 500 (SNPINDEX: ^GSPC) hasn't had a rolling 20-year period with a negative total return, including dividends, since its inception. It speaks to the power of long-term investing in the stock market.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

While there is no shortage of stock investment strategies to choose from to grow your wealth, few have been as consistently successful as buying and holding high-quality dividend stocks.

In The Power of Dividends: Past, Present, and Future, researchers at Hartford Funds, in collaboration with Ned Davis Research, compared the performance of dividend stocks to non-payers over a 51-year stretch (1973-2024). This analysis found that dividend stocks more than doubled the average annual return of non-payers -- 9.2% for income stocks versus 4.31% for non-payers -- and did so while being less volatile than the benchmark S&P 500.

Image source: Getty Images.

With the stock market nearing its second-priciest valuation when back-tested more than 150 years, finding gems in the dividend space can really perk up your portfolio and offer a solid foundation to fall back on during periods of turbulence.

Right now, what's arguably Wall Street's greatest dividend stock makes for a screaming buy -- and there's a very high probability you've never heard of this company before.

There are layers of rarity among dividend stocks

Just because dividend stocks have historically outperformed, it doesn't mean every income stock is special or worth buying.

Truth be told, dividends aren't rare. Around 80% of the 500 companies that comprise the broad-based S&P 500 pay a dividend to their shareholders. In total, there are well over 1,000 securities trading on U.S. exchanges, including stocks and exchange-traded funds (ETFs), doling out dividend payments to their investors.

Among these dividend stocks are pockets of rarity.

For instance, 56 companies would qualify as a Dividend King -- i.e., a business that's increased its base annual payout for at least 50 years. If a company boasts a track record of increasing its base annual payout for a half-century or longer, it's clearly doing something right. These are predominantly time-tested, innovative businesses that are leaders within their respective industries.

But we can take this level of income stock rarity one step further. Though 56 companies among many thousands of public securities in the U.S. is rare, it's not quite as unique as the roughly two dozen public companies that have paid a continuous dividend for at least a century.

It's within this special classification that you'll find Wall Street's greatest (and mostly unheard of) dividend stock, York Water (NASDAQ: YORW).

Image source: Getty Images.

York Water is historically cheap and truly in a class of its own

As its name implies, York is a water and wastewater utility. The reason most folks haven't heard of this company before is because it services only 57 municipalities within four counties in South-Central Pennsylvania, and its average daily trading volume is only 102,000 shares. It's not a company that tends to generate a lot of buzz on Wall Street.

However, York Water's dividend is truly special. Among the public companies that have paid a continuous dividend for 100-plus years, power tools provider Stanley Black & Decker boasts the second-longest streak at 149 years. York sits atop the pedestal and has Stanley Black & Decker beat by six full decades.

For 209 years (since 1816), York has been doling out a dividend to its shareholders. It's a testament to the stability, growth, and opportunity that York has to offer its investors.

What makes York's business model tick is the predictability of its operating cash flow. Because of the high costs associated with laying pipeline, most water utilities operate as monopolies in the areas they service. That means utilities don't have to worry about competitors siphoning away their customers.

To build on this point, water and wastewater demand doesn't change much from one year to the next. Management typically has a good bead on what to expect, in terms of costs, and can plan new projects and/or bolt-on acquisitions without hampering the company's profitability.

Another catalyst that explains York's success is its regulated operating model. "Regulated" utilities have their rates overseen by a state public utility commission. In York's case, it must seek permission from the Pennsylvania Public Utility Commission (PPUC) before increasing rates on its customers.

Though this might sound suboptimal, it's actually fantastic news. It ensures that York Water won't have to deal with wholesale pricing, and makes projecting revenue, cash flow, and profits that much easier.

For what it's worth, York Water has a pretty good track record of winning over the PPUC with rate increases. In late May, the company filed a rate hike request following $145 million in capital investments since its last rate increase request in 2022. If approved, York would see its annual revenue jump by $24.2 million, or 32% (relative to its full-year revenue in 2024).

Rounding things out is York Water's historically inexpensive valuation. Based on its closing price of $31.07 per share on Aug. 29, York is trading at less than 20 times forward-year earnings. This works out to a 33% discount to its average forward price-to-earnings multiple over the last half-decade. When you add its 2.8% dividend yield into the equation, it's easy to see why Wall Street's greatest dividend stock is a screaming buy in September.

Should you invest $1,000 in York Water right now?

Before you buy stock in York Water, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and York Water wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $654,759!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,046,799!*

Now, it’s worth noting Stock Advisor’s total average return is 1,042% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

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