Oh, water . how I wish folks would forget about you. This is one of those cases where my interests probably run contrary to those of the investor relations chief at Aqua America (NYSE:WTR). See, I'd be perfectly happy if folks would just forget that Aqua America exists for a little while. That way I might be able to pick up shares without going against my own valuation criteria.

But seeing as that's not too terribly likely, on with the show .

Results for the second quarter don't look terribly impressive, but I've mentioned before that quarter-by-quarter analysis isn't really well-suited to this industry. Revenue was up 7% this time around, with operating income rising 3% and reported earnings per share basically flat. On a more encouraging note, the company did decide to raise the dividend, so maybe that will help shareholders offset rising water bills (at least if they live in the South).

Other things going on with Aqua America frankly matter more to me. For instance, the company won a pretty significant rate case in Pennsylvania that will not only produce returns in excess of the cost of capital, but also add some incremental revenue to the pot (from a 9% increase in base rates). Moreover, the company continues to do deals like a recent acquisition in New York state that will boost results immediately and continue to pay off down the line as the company files for better rates.

There are plenty of good reasons for this stock to be expensive. First, people have been beating the drum on the water infrastructure investment idea for more than a year now (myself included). Second, management here is pretty good -- some may not like the acquisition strategy, but that's their problem. Finally, there's significant scarcity value. Aqua America is the biggest publicly traded water company in the U.S., much larger than American States (NYSE:AWR), but looks downright runty compared with European giants like Suez (NYSE:SZE), Veolia (NYSE:VE), United Utilities (NYSE:UU), and RWE.

Just because there are good reasons for a stock to be expensive, that doesn't mean you should necessarily pay up. I for one always favor stocks that I believe trade below fair value -- it just makes outperformance easier in the long run. So while I wouldn't necessarily talk anyone out of buying in today, particularly those with a long-term focus, I myself will continue waiting for the right price.

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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).