Water Stocks To Buy #4 – Aqua America
As we continue to use more water, prices for the critical commodity will rise – even if those prices are capped by regulators. That will be a big win for the various water utilities in our nations. And when it comes to water utilities, Aqua America (WTR) is the clear winner.
WTR’s strategy over the past decade or so has been to buy up smaller and local municipal water authorizes. Strapped for cash, these smaller and town/city-based utilities simply don’t have the kind of money needed to improve their water infrastructure. Given its size, Aqua America is able to swoop in and save the local authority, while gaining control of its assets.
That strategy has been pretty successful over the years and WTR now has about 3 million customers across 13 different states.
And as a utility, WTR churns out steady cash flows and dividends. While not as high-yielding as an electric utility – due to the rate cap on water – WTR does pay out a nice 2.5% dividend, better than many of its water stocks rivals.
And WTR has managed to grow that yield by about 8% over the last five years.