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Global Water Resources (NASDAQ:GWRS) Will Pay A Dividend Of $0.0253

Simply Wall St · 3d ago

Global Water Resources, Inc. (NASDAQ:GWRS) has announced that it will pay a dividend of $0.0253 per share on the 30th of January. The dividend yield will be 3.5% based on this payment which is still above the industry average.

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Global Water Resources' Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, the dividend made up 178% of earnings, and the company was generating negative free cash flows. Paying out such a large dividend compared to earnings while also not generating free cash flows is a major warning sign for the sustainability of the dividend as these levels are certainly a bit high.

Earnings per share is forecast to rise by 121.2% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could reach 80%, which is on the higher side, but certainly still feasible.

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NasdaqGM:GWRS Historic Dividend January 6th 2026

See our latest analysis for Global Water Resources

Global Water Resources Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.28 in 2016, and the most recent fiscal year payment was $0.304. Its dividends have grown at less than 1% per annum over this time frame. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Global Water Resources' Dividend Might Lack Growth

Investors could be attracted to the stock based on the quality of its payment history. Global Water Resources has impressed us by growing EPS at 25% per year over the past five years. Strong earnings is nice to see, but unless this can be sustained on minimal reinvestment of profits, we would question whether dividends will follow suit.

We should note that Global Water Resources has issued stock equal to 19% of shares outstanding. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.

The Dividend Could Prove To Be Unreliable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Global Water Resources' payments, as there could be some issues with sustaining them into the future. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We don't think Global Water Resources is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 5 warning signs for Global Water Resources (3 don't sit too well with us!) that you should be aware of before investing. Is Global Water Resources not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.