If the reader emails I get are any indication, a lot of people have bought into the water story. Some have focused on utilities like American States Water (NYSE:AWR) or Aqua America (NYSE:WTR), others on more product-oriented companies like Franklin Electric (NASDAQ:FELE) and Pall (NYSE:PLL), and still others on the more all-encompassing PowerSharesWater Resources (NYSE:PHO) ETF.

But it seems as though some investors' patience is being sorely tested. Although the sector hasn't done too badly relative to the S&P 500, it seems that some folks were expecting a quicker buck on this idea. Well, folks, that's just not the way water works. There's money to be made here, but you're gonna have to be patient.

To that end, I don't really see much to get worked up about in American States Water's earnings for the second quarter. Revenue was up about 3%, operating income was down about 8%, and net income was up about 9%, as reported. The water business was hurt by decreased consumption, the power business was helped by increased consumption, and the company's unregulated businesses are growing, but still only a small part of the whole.

The deal with water stocks, at least in my opinion, is long-term population growth and long-term pricing power. Investing in infrastructure upgrades is generally supported by regulatory rate increases, thus representing a near-guaranteed return for the companies (as long as they don't botch the execution). If regulatory agencies aren't willing to give the companies the rates, the companies won't spend on the infrastructure, and then things could get very nasty. In other words, rates will keep going up, and returns should stay pretty attractive.

Should you buy American States Water today? I don't know. The price and the dividend yield don't look terrible, but they also don't scream "bargain" to me, either. I like the business well enough, though, and I think there's long-term potential here, so I suppose truly long-term investors could do all right at today's prices.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).