Updated 3/26
SJW Group has been around for over a century, quietly providing essential water utility services to millions across California, Texas, Connecticut, and Maine. It’s the kind of company that doesn’t chase headlines or tech buzz—it just sticks to the basics: water, infrastructure, and long-term value. For dividend-focused investors, that type of grounded business model can be appealing, especially when it comes with a steady payout history.
As of the most recent close on March 26, SJW shares were priced at $51.94. The stock has faced some pressure over the past year, but the underlying fundamentals remain solid. With a yield above 3% and a consistent track record of dividend increases, it’s worth taking a closer look.
Recent Events
In the latest quarter, SJW showed some encouraging numbers. Quarterly revenue grew by 15.5% year-over-year, and earnings followed suit with a 21% boost. That’s not just solid growth—it’s a signal that despite the usual challenges utilities face, SJW is managing its operations efficiently and delivering on expectations.
Still, the stock is trading around 16% below its 52-week high. There’s a bit of disconnect between how the business is performing and how the market is pricing it. It might have something to do with rising interest rates and investor sentiment toward utilities in a higher-rate environment. These companies are capital intensive, and rising borrowing costs can impact their bottom line. But as we’ll explore, SJW has managed its financials well enough to keep the dividend safe and sound.
Key Dividend Metrics
💰 Forward Dividend Yield: 3.23%
📆 Dividend Frequency: Quarterly
📈 5-Year Average Yield: 2.25%
📊 Payout Ratio: 55.75%
🚀 Recent Dividend Growth: Consistent yearly increases
📅 Next Dividend Pay Date: March 3, 2025
📉 Ex-Dividend Date: February 10, 2025
Dividend Overview
SJW isn’t trying to dazzle anyone with a monster dividend yield—but at over 3%, it’s offering real income, especially when compared to many peers in the utility space. And it’s not just about the yield—what matters more is how dependable that payout is.
The company’s dividend track record stretches back for decades. More impressively, it has consistently raised its dividend year after year. The latest bump brought the annual payout to $1.68 per share, which reflects management’s ongoing commitment to returning capital to shareholders.
The yield sits comfortably above its five-year average, which tells us the stock might be slightly undervalued relative to its dividend history. In short, investors are being paid a little more than usual to own a company that has never strayed far from its income-first roots.
Dividend Growth and Safety
One of the standout features of SJW’s dividend story is its consistency. The company hasn’t missed a payment in decades, and it’s managed to increase the dividend each year. That kind of dependability doesn’t come from luck—it comes from disciplined financial planning.
At a payout ratio of just under 56%, SJW is sitting in the sweet spot. It’s high enough to suggest the company is genuinely committed to paying shareholders, but low enough to leave room for reinvestment in infrastructure and future growth. Given the nature of the utility business—with its regulated revenues and predictable cash flows—it’s not surprising that SJW can offer both income and stability.
What’s also encouraging is that the company isn’t overleveraging itself just to maintain its dividend. Even with rising interest rates and capital needs, management has kept things under control.
Chart Analysis
Market Cycle Context and Wyckoff Phase
Looking at SJW’s price action over the past year, the overall behavior reflects a textbook markdown phase that began in late October, followed by signs of potential early accumulation through early 2025. The steep decline from October to late December aligns with classic markdown dynamics—lower lows, minimal support, and weak volume structure.
By January, the price found a bottom just under 46 and began a series of higher lows and modestly higher highs into March. This pattern, combined with the sharp bounce from the December low, looks like the early signs of Phase B within Wyckoff’s accumulation structure—where volatility remains but demand starts showing up in dips.
Moving Averages and Price Action
The 50-day moving average (orange) has recently turned upward, signaling an attempt to shift short-term momentum. However, it’s still hovering just below the 200-day moving average (blue), which continues sloping downward. This setup reflects a weak crossover scenario—buyers are trying to regain control, but broader trend pressure hasn’t let up. The price is currently hovering just under the 50-day average, having briefly pushed above it earlier in March.
This recent pullback from the March peak shows a failed breakout attempt, where the stock couldn’t hold above both moving averages. Until we see a convincing close above the 200-day with strong volume follow-through, it’s difficult to call this a confirmed trend reversal.
Volume and Buyer/Seller Strength
Volume has been relatively steady, though it hasn’t shown the kind of surge you’d expect in a breakout scenario. The spikes seen in October, December, and February were more aligned with short covering or forced selling than institutional buying. Recent candles show decreasing volume on up days, which usually suggests a lack of conviction behind the upward move.
That said, volume dried up during the lows in December—a typical pattern in Phase A of Wyckoff accumulation, where selling exhausts and price drifts sideways with a slight upward bias.
RSI and Momentum
The Relative Strength Index (RSI) has been rising since early January but is starting to curl down again, sitting slightly above neutral. Back in December, RSI dipped below 30, confirming the oversold condition. Since then, momentum has slowly recovered, but there hasn’t been any strong breakout above the 60 mark, which is what you’d like to see in a confirmed bull swing.
This recent RSI softening mirrors the price rejection in mid-March—both hint at weakening buying pressure as the price tried to move above 54 but got turned away.
Last Five Candles
The most recent five candles tell a short but clear story. Prices attempted to stay above the 50-day moving average but couldn’t gather strength. There were upper wicks on multiple candles, especially around the $52 mark, indicating sellers are stepping in at that level. Meanwhile, lower wicks are short or absent, suggesting buyers are not strongly defending the current price. One green candle had slightly higher volume, but it didn’t push the price meaningfully higher, which tells us buying effort lacked follow-through.
This setup leans more toward a short-term pause or potential re-test of the support near $50 before any sustainable upward move can take hold.
Analyst Ratings
📈 In recent months, SJW Group has seen notable shifts in analyst sentiment. On February 3, 2025, one major investment bank upgraded the stock from a “Hold” to a “Strong Buy,” while adjusting their price target from $59 to $55. This was followed by another firm on February 28, 2025, which maintained a “Hold” rating but nudged its price target up from $53 to $57.
🎯 The current consensus 12-month price target now sits at $56, which implies a moderate upside from the current trading level. Most analysts appear to be recognizing a degree of value at current prices, especially given the company’s consistent dividend track record and recent financial performance.
💡 The upgrade earlier in February was driven by signs of improving earnings growth and stronger-than-expected quarterly results. Analysts pointed to the company’s ability to maintain operating margins while continuing to invest in infrastructure—despite a tough macro environment. That showed up in the year-over-year revenue and earnings gains, which likely helped shift the tone from neutral to bullish.
🔍 At the same time, the more cautious “Hold” rating from the second firm reflects lingering concerns around high debt levels and tight free cash flow. These factors are keeping some analysts from jumping fully onboard until more clarity emerges around capital efficiency and future rate case approvals.
📊 Overall, the mix of ratings leans slightly positive, with moderate upside potential seen over the next 12 months. Analysts seem to agree that while SJW might not deliver explosive growth, its steady fundamentals and reliable dividend remain a strong part of the story.
Earnings Report Summary
Strong Top-Line Growth
In the final quarter of 2024, SJW Group delivered a solid performance that reflected its steady hand in managing both growth and operations. Revenue for the quarter came in at $197.8 million, up about 15% compared to the same time last year. That increase was largely fueled by higher water usage and updated rate structures. As customers consumed more and the company brought in additional revenue from rate adjustments, the top line responded accordingly.
Earnings Climb Higher
On the earnings side, things looked healthy too. Net income for the quarter landed at $22.9 million, which breaks down to $0.68 per diluted share. That’s a noticeable jump from the $0.59 per share earned during the same period a year ago. When you strip out one-time items like costs tied to real estate and acquisition activity, adjusted earnings rose even more sharply—up to $24.8 million, or $0.74 per share. That’s a 31% year-over-year increase, showing the company isn’t just growing revenue but also converting more of it into profit.
Full-Year Results Paint a Consistent Picture
For the full year, SJW pulled in $748.4 million in operating revenue, up 12% from the previous year. That growth was powered not just by higher water usage but also by expansion in their customer base, particularly in Texas where demand continues to trend upward. Full-year net income was $94 million, or $2.87 per share, up from $2.68 per share in 2023. Adjusted net income was even stronger at $2.95 per share, showing a consistent upward climb in profitability.
Costs and Investments
Operating expenses also ticked higher, up 11% from the year before. That’s not too surprising considering rising production costs and investments in infrastructure. The company also saw increased depreciation, which reflects the new capital being put to work. Despite those higher costs, margins held up well—management seems to be keeping things efficient.
One thing that stood out was capital spending. SJW put $353 million to work in 2024, a bit more than they had planned. Most of that went toward improving water supply and infrastructure. And they’re not done—there’s a $2 billion investment plan laid out for the next five years. It’s a big commitment, but one that aligns with their long-term view of growth through reliability and infrastructure upgrades.
Tax and Other Notes
The effective tax rate nudged up a bit from 7% to 9%, mostly due to changes in reserves and adjustments tied to stock-based compensation. It’s a slight shift but not out of step with expectations. Overall, SJW closed the year on a strong note and seems well-positioned to keep building on that momentum going forward.
Financial Health and Stability
SJW operates in a capital-heavy industry, so debt levels are always going to be a part of the picture. Currently, the company carries about $1.83 billion in total debt, which works out to a debt-to-equity ratio of 133.85%. That’s high, no doubt. But again, this is a utility—we expect debt to be a significant part of the capital structure.
The current ratio is on the low side at 0.73, suggesting the company doesn’t have a ton of short-term liquidity. However, utilities often run lean on this front, relying on steady cash flow and long-term financing to manage operations.
Net income over the last twelve months came in at $93.97 million, while operating cash flow stood at $195.53 million. The company’s EBITDA of nearly $293 million gives it a decent cushion to cover interest payments and dividends.
The one area of concern is levered free cash flow, which is currently negative at around -$141 million. That likely reflects ongoing capital projects and infrastructure upgrades—common in this sector—but it’s worth monitoring. As long as revenue growth and profitability stay on track, the negative free cash flow should be manageable.
Valuation and Stock Performance
SJW is trading at a forward price-to-earnings ratio of 17.61. That’s not cheap, but it’s also not expensive by utility standards. Investors are generally willing to pay up a bit for dependable cash flow and dividend security. The trailing P/E sits at 18.1, reflecting a relatively stable earnings outlook.
In terms of book value, SJW trades at about 1.28 times book—a reasonable figure for a company with hard infrastructure assets and long-term earnings visibility. Its price-to-sales ratio of 2.27 and EV/EBITDA of 12.33 suggest that while the stock is not a screaming bargain, it’s not overextended either.
Over the past year, shares are down about 8%. This underperformance has more to do with macro conditions—like interest rate pressure on utilities—than any specific misstep by the company. With a low beta of 0.57, SJW doesn’t tend to move in sync with the broader market. That kind of relative stability can be appealing for investors who want steady dividends without the rollercoaster of high-volatility stocks.
Risks and Considerations
Like any utility, SJW faces a few notable risks.
First, there’s the high debt level. While it’s normal in this space, it does mean the company is sensitive to interest rate increases. If borrowing costs rise significantly, it could pinch margins or limit future dividend growth.
Second, there’s the issue of capital expenditure. Water utilities are constantly upgrading pipes, treatment plants, and infrastructure. These projects are expensive, and while they’re necessary, they can eat into free cash flow and impact the financials.
Regulatory risk is always present too. Utilities are heavily regulated, and changes in rate structures or public policy could affect earnings potential. While SJW has a good track record of managing these dynamics, it’s something dividend investors need to consider.
Lastly, environmental factors—like droughts or water shortages—could impact operations, especially in areas like California where SJW has a significant presence.
Final Thoughts
SJW Group may not be a household name in the investment world, but it has something many income investors are after: reliability. It’s a utility with a long history, stable cash flows, and a dividend that has quietly grown over the years without drawing much attention.
The company is navigating a challenging environment with rising costs and macro headwinds, but it’s doing so without compromising on its dividend commitment. For those who appreciate the combination of essential services and a stable income stream, SJW offers a steady hand in a sometimes unpredictable market.
With its focus on water—arguably the most essential utility of all—this is a business that will likely remain relevant, needed, and able to reward shareholders for years to come.