Utility Aqua America Offers Gushing Growth

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Utilities are not known for stellar growth, butAqua America ( WTR ) is an exception.

The Bryn Mawr, Pa.-based firm has delivered percentage growth of double digits or better in recent quarters.

On Monday, Aqua America reported a fourth-quarter profit from continuing operations of 46 cents a share, up more than 100% from the year-ago period. Earnings had grown 11% to 25% in the prior three quarters.


But note that in the latest quarter, Aqua America's bottom line was boosted by an accounting change for a subsidiary that added about 22 cents a share. The change, which will continue to provide a benefit in future periods, allows the firm to take a tax deduction on investments.

The company's sales grew 12% to $187.5 million -- the third straight period of double-digit growth.

For all of 2012, Aqua America's earnings and sales climbed 45% and 10%, respectively. Results were boosted by a number of acquisitions.

Like most utilities, Aqua America pays dividends. It has paid them for more than 65 years.

Earlier this month, the company raised its quarterly dividend by 6.1% to 17.5 cents a share -- the 22nd increase in the past 21 years. At an annual rate of 70 cents a share, Aqua America has a yield of about 2.4%, which is among the highest in IBD's Utility-Water Supply industry group.

Aqua America has an IBD Composite Rating of 90, the highest in its 13-member group. It has a beta of 0.51, meaning that it has roughly half of the volatility of the market.

Even though the stock market has grown turbulent in recent sessions, Aqua America remains near an all-time high. The stock cleared a 27.03 buy point from a long flat base in late January.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: WTR

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