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Here's Why You Should Dump Aqua America From Your Portfolio
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Shares of Aqua America Inc. have underperformed the Zacks Utility Water Supply industry in the last 12 months. The stock has returned 6.2% compared with the industry’s rally of 10.1 %. The company witnessed deterioration in 2018 estimates, which fell 2.08% in the last 30 days. Aqua America carries a Zacks Rank #4 (Sell).
Adhering to safety measures is an important factor of water utility. Quality tests, monitoring and treatment incur extra cost. Additionally, any form of contamination can result in disruption of water supply and services.
Steady investment toward maintenance, upgrade and replacement of old pipelines is mandatory. Increased interest rates and possibility of more interest rate hikes in 2018 might make it difficult for Aqua America to raise funds. This is likely to have an adverse impact on capital expenditure and dividend payment.
The company is trading at a premium at the current valuation level. Aqua America’s P/E ratio is 23.87%, a premium compared with industry average of 18.77%.. Return on equity of 12.7% is lower than the industry average of 15.2%. Also, the price earnings growth ratio, which determines the relative trade-off between a stock, earnings generated per share and the company's expected growth, is 4. This is higher than the industry average of 2.74.
The water utilities are subject to certain federal and state environmental laws and regulations as well as weather conditions. Unfavorable economy can reduce demand for water.
Stocks to Consider
A few better-ranked stocks in the same industry are Connecticut Water Service, Inc. , American States Water Company (AWR - Free Report) and American Water Works (AWK - Free Report) . American Water Works and Connecticut Water Service carry a Zacks Rank #3 (Hold), while American States Water holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Connecticut Water Service delivered a positive surprise of 28.57% in the previous quarter's earnings. Expected EPS growth for next 5 years is 6.00%.
Last quarter, American States Water delivered a positive earnings surprise of 2.86%. Expected EPS growth for next 5 years is 5.00%.
American Water Works reported a positive earnings surprise of 4.55% in the preceding quarter. Expected EPS growth for next 5 years is 7.50%.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
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Here's Why You Should Dump Aqua America From Your Portfolio
Shares of Aqua America Inc. have underperformed the Zacks Utility Water Supply industry in the last 12 months. The stock has returned 6.2% compared with the industry’s rally of 10.1 %. The company witnessed deterioration in 2018 estimates, which fell 2.08% in the last 30 days. Aqua America carries a Zacks Rank #4 (Sell).
Adhering to safety measures is an important factor of water utility. Quality tests, monitoring and treatment incur extra cost. Additionally, any form of contamination can result in disruption of water supply and services.
Steady investment toward maintenance, upgrade and replacement of old pipelines is mandatory. Increased interest rates and possibility of more interest rate hikes in 2018 might make it difficult for Aqua America to raise funds. This is likely to have an adverse impact on capital expenditure and dividend payment.
The company is trading at a premium at the current valuation level. Aqua America’s P/E ratio is 23.87%, a premium compared with industry average of 18.77%.. Return on equity of 12.7% is lower than the industry average of 15.2%. Also, the price earnings growth ratio, which determines the relative trade-off between a stock, earnings generated per share and the company's expected growth, is 4. This is higher than the industry average of 2.74.
The water utilities are subject to certain federal and state environmental laws and regulations as well as weather conditions. Unfavorable economy can reduce demand for water.
Stocks to Consider
A few better-ranked stocks in the same industry are Connecticut Water Service, Inc. , American States Water Company (AWR - Free Report) and American Water Works (AWK - Free Report) . American Water Works and Connecticut Water Service carry a Zacks Rank #3 (Hold), while American States Water holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Connecticut Water Service delivered a positive surprise of 28.57% in the previous quarter's earnings. Expected EPS growth for next 5 years is 6.00%.
Last quarter, American States Water delivered a positive earnings surprise of 2.86%. Expected EPS growth for next 5 years is 5.00%.
American Water Works reported a positive earnings surprise of 4.55% in the preceding quarter. Expected EPS growth for next 5 years is 7.50%.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>