Artesian Resources And York Water Should Merge

|
About: Artesian Resources Corporation (ARTNB), ARTNA, Includes: AWK, BF.A, BF.B, CWT, ES, NWN, SJW, WTR, YORW
by: Goose Hollow Investments
This article is exclusive for subscribers.
Goose Hollow Investments
Value, growth at reasonable price, contrarian, dividend growth investing
Summary

Artesian Resources and York Water are both small-cap water utilities in the mid-Atlantic.

A merger would take advantage of regional overlap, facilitate future M&A, and improve profitability.

An all-stock merger of equals offers a way to achieve the merger, though it would probably be tough to get family-controlled Artesian Resources to the table.

ARTNA is undervalued by most metrics and the only water utility I currently rate as a buy.

YORW has run ahead of its valuation; I'd suggest holding or staying on the sidelines unless the price comes down 30+%.

York Water and Artesian Resources Should Merge

York Water (YORW) and Artesian Resources (ARTNA, OTCQB:ARTNB) are two small-cap water utilities based in the mid-Atlantic. Below I make the case for