Looking for one of those companies that you know will pay dividends, has solid management and consistently trades at a respectable level without wild swings in price? Then you might want to take a look at Aqua America.
Aqua America (WTR) is a water and wastewater company that provides water to homes, offices, and industrial customers across 14 state. Its utility services reach 2.8 million residential customers. Residential water services account for almost 60% of its yearly revenue.
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The stock does not move a whole lot, but is pretty steady and has been for a number of years. In January of 2010 the stock grew all year, growing about 30% for the year. Since January of 2011 it has traded between 20.5 and 22.5. This has been its trading range.
Hilliard Lyons just decreased Aqua America's rating from Buy to Long-term Buy. Or just a hold. This indicates that the company may not be doing as well as investors were expecting. Look for potential selling pressure or a downside move in the share price. This was the beginning of March but the selling pressure never manifested. It has continued to trade up and down in this zone it has been in for so long.
What this company has going for it is solid management that knows how to use its resources to make money better than most companies like itself. If we take a look at the Investment Ratios as compared to the industry standard we will see how this team has done an outstanding job with its resources.
Return on Equities: WTR- 11.94 Industry- 11.03
Return on Assets: WTR- 3.4 Industry- 2.9
Return on Capital: WTR- 3.8 Industry- 3.3
We have an outstanding management team that has been able to keep this company consistently profitable.
They also offer a modest 2.8% dividend on a 61% payout that is projected to grow each quarter this year. This first quarter projections for growth are 12.28%, next quarter 9.78% and 15.38% for 2012.
That is a nice (growth rate) for a company with good sound management that is consistent year after year. Aqua America has been like for the last couple years. It will be there when you need a consistent dependable stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
