Aqua America Inc. (NYSE:WTRG) reported second-quarter results after the market closed on Tuesday. The water utility reported an in-line quarter, with acquisitions delivering the expected earnings growth. Those solid results are flowing down to shareholders, as the company boosted its dividend by 7.9% to $0.178 per share.

A look at the numbers
Aqua America reported revenue of $205.8 million for the quarter, up 5.4% from the second quarter of last year. Approximately two-thirds of this increase came from customer growth in both its regulated and market-based businesses while rates, surcharges, and consumption drove the balance of the company's revenue growth in the quarter. Customer growth came primarily from acquisitions: The company has completed eight so far this year, adding 8,700 more customers to its roster.

This customer growth trickled down to the bottom line, with income from continuing operations increasing by 4.7% year over year to $57.4 million. Meanwhile, on a per-share basis, earnings were $0.32, a penny higher than the year-ago quarter and in line with estimates. Earnings would have been even higher if not for a bump in expenses driven by the company's leadership transition, acquisitions, and other one-time items.

Thanks to those solid results, as well as the company's solid financial position, Aqua America is trickling down a bit more income to its investors, with a 7.9% increase to its dividend. That marks the 25th increase in the past 24 years, with increases over the past decade coming at an annualized rate of 7.6%.

A look at the outlook
Acquisitions continue to be an important component of Aqua America's growth. However, in the near term, the company's focus will be on fully optimizing recently acquired assets so that it can better control expenses. That's part of the company's plan to maintain its industry-leading cost structure.

That said, the company continues to look for new opportunities, since it wants to continue to bring its expertise to new customers through the acquisition of water and wastewater utilities. In commenting on acquisitions, recently named CEO Christopher Franklin said:

We feel strongly that there are opportunities for us to grow by acquiring both municipal and privately owned systems, creating a win-win for the customers and communities we serve. Our financial strength and expertise in the water and wastewater utility space, allows us to competitively bid on systems that might be experiencing capital constraints, lack the ability to make infrastructure improvements or have an owner who wants to focus resources and attention elsewhere. The company is also adjusting its approach to acquisitions by more strategically targeting larger systems where possible. The success of this approach is just starting to come to fruition. Even with this adjustment of approach, we will continue to work to solve the problems that plague small utility systems in the states in which we operate.

The company certainly has plenty of financial wherewithal to capture new opportunities as it has $230 million of liquidity available to it on its credit lines, as well as a solid investment-grade credit rating.

Investor takeaway
Aqua America's revenue and earnings continue to rise as it acquires additional utilities. That's trickling down to investors via a higher dividend. Given the company's outlook for future acquisitions, dividend growth shouldn't dry up anytime soon.