We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Aqua America Expands Operation, to Exit 2017 on a High Note
Read MoreHide Full Article
Aqua America Inc. continues to expand its operation through organic growth and strategic acquisitions. The water and wastewater service provider will exit 2017 on a high note buoyed by the addition of 7,100 new customers through organic growth and nearly 1,000 customers through four completed acquisitions.
Aqua America has six pending acquisitions and delay in the completion of these acquisitions due to ongoing challenges has prompted the company to lower its customer growth guidance of 1.5-2% for 2017 to 1%.
Acquisitions Help
Consolidation is the need of the hour for the fragmented U.S. water utility space. This will enable big utilities to make the necessary infrastructure overhauls that have become imperative for the industry at large.
During the five-year period ending Dec 31, 2016, Aqua America expanded its utility operations by completing 84 acquisitions or other growth ventures. The company is expected to continue with its strategic acquisitions going forward. It mainly focuses on municipal water and wastewater systems with 2,500 to 25,000 customers, for the buyouts.
A water utility, American Water Works Company Inc. (AWK - Free Report) also follows an inorganic route to expand its operations. Year to date, it has added 48,400 customers through closed acquisitions and organic growth, and will add another 21,700 customers when all the pending acquisitions are completed.
Investment to Upgrade Infrastructure
The U.S. water infrastructure in quite old and massive investment is required to upgrade the existing water and wastewater systems. Some of the water mains are nearly a century old and require immediate replacement. Investment of billions of dollars is required for the purpose. So, apart from acquisitions, water utilities are also investing to upgrade their existing asset base.
Aqua America has plans to make capital investments of more than $450 million in 2017 as part of an ambitious investment target of more than $1.2 billion in the 2017-2019 period.
Another water utility, Connecticut Water Services has spent $66.3 million on capital projects, a little higher than its initial investment plan of $65.9 million. Its capital expenditure budget for 2017 is $56 million to fund improvements in water treatment plants and increase spending to boost infrastructure. Management has already approved a plan to invest $66.2 million in capital projects in 2018.
Price Movement
Aqua America’s stock has gained 30.0% in the last 12 months, outperforming the 21.9% rally of the industry.
The company benefits from acquisitions, investment in infrastructure upgrades and rate hikes in its service territories.
The York Water Company, a Zacks Rank#2 (Buy) stock reported a positive earnings surprise of 10.7% in the third quarter. Its 2017 earnings estimates moved up 3.1% to 99 cents in the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Aqua America Expands Operation, to Exit 2017 on a High Note
Aqua America Inc. continues to expand its operation through organic growth and strategic acquisitions. The water and wastewater service provider will exit 2017 on a high note buoyed by the addition of 7,100 new customers through organic growth and nearly 1,000 customers through four completed acquisitions.
Aqua America has six pending acquisitions and delay in the completion of these acquisitions due to ongoing challenges has prompted the company to lower its customer growth guidance of 1.5-2% for 2017 to 1%.
Acquisitions Help
Consolidation is the need of the hour for the fragmented U.S. water utility space. This will enable big utilities to make the necessary infrastructure overhauls that have become imperative for the industry at large.
During the five-year period ending Dec 31, 2016, Aqua America expanded its utility operations by completing 84 acquisitions or other growth ventures. The company is expected to continue with its strategic acquisitions going forward. It mainly focuses on municipal water and wastewater systems with 2,500 to 25,000 customers, for the buyouts.
A water utility, American Water Works Company Inc. (AWK - Free Report) also follows an inorganic route to expand its operations. Year to date, it has added 48,400 customers through closed acquisitions and organic growth, and will add another 21,700 customers when all the pending acquisitions are completed.
Investment to Upgrade Infrastructure
The U.S. water infrastructure in quite old and massive investment is required to upgrade the existing water and wastewater systems. Some of the water mains are nearly a century old and require immediate replacement. Investment of billions of dollars is required for the purpose. So, apart from acquisitions, water utilities are also investing to upgrade their existing asset base.
Aqua America has plans to make capital investments of more than $450 million in 2017 as part of an ambitious investment target of more than $1.2 billion in the 2017-2019 period.
Another water utility, Connecticut Water Services has spent $66.3 million on capital projects, a little higher than its initial investment plan of $65.9 million. Its capital expenditure budget for 2017 is $56 million to fund improvements in water treatment plants and increase spending to boost infrastructure. Management has already approved a plan to invest $66.2 million in capital projects in 2018.
Price Movement
Aqua America’s stock has gained 30.0% in the last 12 months, outperforming the 21.9% rally of the industry.
The company benefits from acquisitions, investment in infrastructure upgrades and rate hikes in its service territories.
Zacks Rank & A Key Pick
Aqua America currently has a Zacks Rank #3 (Hold). Another water utility with the better Zacks Rank is The York Water Company (YORW - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The York Water Company, a Zacks Rank#2 (Buy) stock reported a positive earnings surprise of 10.7% in the third quarter. Its 2017 earnings estimates moved up 3.1% to 99 cents in the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>