While a water utility may seem like an odd choice for a list of high-yielding energy stocks, the truth is Aqua America (WTR) is very much becoming a shale superstar in its own right.
Aside from sand, fracking a well takes a lot of water — millions of gallons, in fact. All of which must be transported to and away from the drilling site. Not to mention be cleaned before being returned aquifers and waterways. That’s where WTR comes in.
Last year, WTR partnered with Penn Virginia (PVA) to build a pipeline that will supply fresh water to energy firms’ drill sites in the Marcellus shale. Within two months of completion, the pipeline had already eliminated more than 4,000 water truck trips over rural roadways. WTR has already begun plans to expand that network outwards in the rest of the Marcellus to take advantage of rising drilling activity in the shale formation.
Providing water for fracking has helped Aqua America diversify its portfolio outside of the core business of regulated water services. That has helped elevate it among dividend stocks as well. WTR’s dividend is now a market-beating 2.6%.