How is Aqua America moving forward into 2012? Let's find out.
Making progress slowly
A utility almost never offers earth-shattering news, but that's not why anyone would invest in one. And there has been plenty of news out of Aqua America this year, mostly regarding multiple acquisitions. Here are the big ones:
- At the end of 2010, Aqua bought operations serving about 5,300 Texan customers from American Water Works
and sold Missouri operations serving 3,900. (NYSE: AWK)
- Aqua sold Maine operations serving 16,000 customers to Connecticut Water Service
in mid-2011. (Nasdaq: CTWS)
- At the same time, Aqua undertook two large transactions, acquiring 57,000 Ohio customers from American Water Works and selling off New York operations serving 51,000.
One interesting disclosure was that a subsidiary had entered into a pipeline venture to supply water to natural gas fracking operations in Pennsylvania's Marcellus formation. When it comes online sometime in the first half of the year, the new venture could boost the company's take by a fair bit more than adding a few homeowners at a time, because fracking tends to require millions of gallons of fluid in order to work.
On the other hand, it could cause PR headaches, such as what befell Chesapeake Energy
That's hardly a reason to run from a utility that's been growing steadily and has few obstacles in its acquisitive path, but it's worth keeping an eye on. The company trades at two-thirds of the earnings multiple of larger water services provider Veolia Environnement
Thinking about picking up some shares, or just want to stay on top of the latest news? Add Aqua America to your Watchlist to get updates any time our Foolish curiosity is piqued. If you're looking for other stable dividend stocks, request your copy of The Motley Fool's free report on 11 rock-solid dividend payers.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. Motley Fool newsletter services have recommended buying shares of Aqua America, Chesapeake Energy, and Veolia Environnement. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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