Hot stock to watch: Aqua America Inc (NYSE: WTR)

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Aqua America Inc (NYSE: WTR) stock rose over 1.2% on 5th November, 2019 (as of 11:41 am GMT-5; Source: Google finance) as the company posted better than expected earnings for the third quarter of FY 19.

Meanwhile, Aqua had invested $401.6 million in the first nine months of 2019 for the improvement of its infrastructure systems. To replace and expand its water and wastewater utility infrastructure, the company intends to invest more than $550 million in 2019 and about $1.4 billion through 2021. The capital investments were made to rehabilitate and for the expansion of the infrastructure of the communities Aqua

Moreover, the company during the quarter had signed purchase agreements for other municipal water and wastewater acquisitions that are projected to add 22,600 customers to the Aqua family in 2019 and early 2020 and about $110 million in expected rate base. Included in this is the purchase agreement to acquire the water system of Campbell, Ohio, which is a utility with about 3,200 customer connections. Further, the company has closed one small privately owned regulated system in Virginia and has also signed a purchase agreement for another regulated utility system in Illinois this year. The company intends to grow its customers between 2 and 3 percent in 2019.

WTR in the third quarter of FY 19 has reported the adjusted earnings per share of 48 cents, beating the analysts’ estimates for the adjusted earnings per share of 43 cents. The company had reported 16% increase in the adjusted income in the third quarter of 2019 to $85.6 million (non-GAAP) on the back of increases from rates, customer growth and volume. The company delivered 7.7% growth in the revenue to $243.6 million.

Additionally, the company has declared a quarterly cash dividend of $0.2343 per share of common stock, which will be payable on Dec. 1, 2019 to shareholders of record on Nov. 15, 2019

For FY 19, the company has reaffirmed its guidance and expects adjusted income per diluted common share (non-GAAP) to be in the range of $1.45 to $1.50. 2019 infrastructure investments are expected to be of approximately $550 million in 2019 for communities served by Aqua. Infrastructure investments are expected to be of approximately $1.4 billion through 2021 in existing operations to rehabilitate and strengthen systems. Rate base compound annual growth rate is expected to be of 7 percent through 2021. Total customer growth is expected to be of between 2 and 3 percent. Closing of Peoples acquisition expected to occur in late 2019 or early in 2020.

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