Best stocks to invest in – Aqua America on Acquisition Spree to Expand Operations



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A major operator in the water and wastewater space, Aqua America Inc. WTR announced that it has expanded its footprint into the states of Pennsylvania, North Carolina, Indiana and Illinois by closing seven acquisitions during the first three months of 2016, thereby increasing its customer count by 4,722.

We note that the U.S. water utility market is quite fragmented. As a result, consolidation of space is the need of the hour, as it will strengthen and expand the existing water and wastewater systems of the country. Large operators like Aqua America have the required financial strength to undertake such large capital expenditure projects and make strategically prudent acquisitions. Notably, Aqua America exited 2015 with as many as 16 acquisitions in its kitty.

These acquisitions will enable the company to expand its customer base, while rendering it a competitive edge. Such initiatives will also enable Aqua America to provide quality water services to its customers, and further strengthen system capability and improve its service reliability.

Another major player in the water utility space, American Water Works Company, Inc. AWK has also been pursuing acquisitions of varying sizes of water systems, in close proximity to its service territories. Recently, itsunit, Pennsylvania American Water, inked an agreement to purchase the waste water assets of Scranton Sewer Authority for $195 million.

Zacks Rank & Key Picks


Aqua America currently carries a Zacks Rank #3 (Hold).

A couple of top-ranked peers in the same space include SJW Corp. SJW and The York Water Co. YORW, bothsporting a Zacks Rank #1 (Strong Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
YORK WATER CO (YORW): Free Stock Analysis Report
 
AMER WATER WORK (AWK): Free Stock Analysis Report
 
SJW CORP (SJW): Free Stock Analysis Report
 
AQUA AMER INC (WTR): Free Stock Analysis Report
 
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