YORW

York Water ($YORW) Executives Buy for 16 Months Straight as $24M Rate Hike Request Spotlights Dividend Utility Value

2025.10.22 03:29

York Water Company ($YORW) executives have been consistently purchasing shares for 16 months despite a 30% stock decline, drawing significant investor attention. Established in 1816, this company is America's oldest investor-owned water utility, serving 190,000 people across 57 municipalities in south-central Pennsylvania. It operates two reservoirs, Lake Williams and Lake Redman, with a combined storage capacity of 2.5 billion gallons. Most notably, CEO Joseph Hand and all executives have been consistently buying shares from June 2024 through October 2025. Hand has been making substantial purchases of nearly $10,000 each time, with his most recent purchase on October 16th totaling 338 shares ($9,750). Significantly, all these transactions occurred through the company's dividend reinvestment plan, indicating voluntary participation rather than mandatory requirements. Insider trading data shows seven key executives, including the CEO, continued buying as the stock fell from the $40s to below $30. This suggests management views current price levels as undervalued and maintains strong confidence in the company's long-term prospects. Another catalyst investors should monitor is the $24.2 million rate increase request filed in May. Based on $145 million in infrastructure investments, if approved, typical residential customers would pay an additional $14.16 monthly for water and $35.85 monthly for wastewater services. The rate increase would boost annual revenue by $24.2 million, representing approximately 32% of current TTM revenue of $76.24 million. Financially, the company demonstrates typical stable utility characteristics. Q2 2025 earnings of $0.35 per share beat analyst expectations of $0.33, with revenue up 2.4% year-over-year to $19.2 million. Operating cash flow stands strong at $31.32 million TTM, though free cash flow is negative at -$29.28 million due to substantial capital investments. The primary concern is high leverage, with a debt-to-equity ratio of 93.33% and current ratio of exactly 1.00, limiting short-term liquidity flexibility. Cash holdings are minimal, requiring reliance on operating cash flow or additional financing. However, such high leverage is typical for utilities in the capital-intensive sector, and the regulated environment provides stable return guarantees that significantly mitigate risks. The company maintains a 2.7% dividend yield with a 63% payout ratio, demonstrating sustainable dividend policy. The key metric for investors is rate increase approval. Approval would significantly expand the revenue base, substantially alleviating current high debt burdens. Conversely, rejection or major reductions could complicate infrastructure investment funding. Long-term positives include 208 years of operational stability, monopolistic business structure, and steady customer base expansion. Water utilities, as essential services, are relatively recession-resistant and can expect stable growth alongside population increases. At the current price of $30.45 (as of October 17th), analyst price targets of $41 suggest approximately 35% upside potential. Considering the two positive catalysts of consistent insider buying and the rate increase application, this appears to be an opportune time for conservative investors seeking stable dividend income alongside reasonable capital appreciation.