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Aqua America Gets $750M Funding to Buy Peoples Natural Gas
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Aqua America announced that it will receive nearly $750 million investment from Canada Pension Plan Investment Board (“CPPIB”). This funding will help Aqua America to complete its pending acquisition of privately-owned natural gas utility, Peoples Natural Gas. The acquisition, on completion, will create a unique utility that will provide water and natural gas services.
Through the $750-million investment, CPPIB will acquire nearly 21.7 million newly issued shares of Aqua America’s common stock.
Acquisition in Utility Space
The water and wastewater infrastructure in the United States is aging, and gradually nearing the end of its effective life. At present, more than 53,000 water systems in the United States provide water solutions to customers. The highly fragmented water industry creates operational challenges in meeting increasing requirement for water.
Growth prospects in the water utility space have resulted in companies like Eversource Energy (ES - Free Report) , which has acquired water utilities to expand operation, to make considerable investments. Other water utilities like American Water Works Company (AWK - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) have been pursuing acquisitions.
Prospects in Natural Gas Industry
Aqua America continues to make strategic acquisitions to expand water operations. It has decided to acquire Peoples Natural Gas in an all-cash deal worth $4.3 billion, inclusive of debt. The acquisition will expand Aqua America’s revenue stream, as the natural gas industry is poised to expand in the United States.
Per the U.S. Energy Information Administration (“EIA”) release, natural gas production in the United States will increase 7% per year during the 2018-2020 time period, primarily due to higher domestic consumption and improving exports. Therefore, given the prospects, we expect to see more investments and acquisitions in the natural gas industry.
Shares of the company have underperformed its industry in the past three months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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Aqua America Gets $750M Funding to Buy Peoples Natural Gas
Aqua America announced that it will receive nearly $750 million investment from Canada Pension Plan Investment Board (“CPPIB”). This funding will help Aqua America to complete its pending acquisition of privately-owned natural gas utility, Peoples Natural Gas. The acquisition, on completion, will create a unique utility that will provide water and natural gas services.
Through the $750-million investment, CPPIB will acquire nearly 21.7 million newly issued shares of Aqua America’s common stock.
Acquisition in Utility Space
The water and wastewater infrastructure in the United States is aging, and gradually nearing the end of its effective life. At present, more than 53,000 water systems in the United States provide water solutions to customers. The highly fragmented water industry creates operational challenges in meeting increasing requirement for water.
Growth prospects in the water utility space have resulted in companies like Eversource Energy (ES - Free Report) , which has acquired water utilities to expand operation, to make considerable investments. Other water utilities like American Water Works Company (AWK - Free Report) and Global Water Resources, Inc. (GWRS - Free Report) have been pursuing acquisitions.
Prospects in Natural Gas Industry
Aqua America continues to make strategic acquisitions to expand water operations. It has decided to acquire Peoples Natural Gas in an all-cash deal worth $4.3 billion, inclusive of debt. The acquisition will expand Aqua America’s revenue stream, as the natural gas industry is poised to expand in the United States.
Per the U.S. Energy Information Administration (“EIA”) release, natural gas production in the United States will increase 7% per year during the 2018-2020 time period, primarily due to higher domestic consumption and improving exports. Therefore, given the prospects, we expect to see more investments and acquisitions in the natural gas industry.
Rank and Price Performance
Currently, Aqua America has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have underperformed its industry in the past three months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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