NYSE:WTR

Stock Analysis Report

Executive Summary

Aqua America, Inc., through its subsidiaries, operates regulated utilities that provide water or wastewater services in the United States.

Rewards

Earnings are forecast to grow 39.7% per year

Pays a reliable dividend of 1.95%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 1.95% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (18%) are lower than last year (29.8%)

+ 1 more risk


Snowflake Analysis

High growth potential average dividend payer.


Similar Companies

American Water Works Company

NYSE:AWK

Share Price & News

How has Aqua America's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WTR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.2%

WTR

4.6%

US Water Utilities

1.2%

US Market


1 Year Return

48.4%

WTR

36.8%

US Water Utilities

24.2%

US Market

Return vs Industry: WTR exceeded the US Water Utilities industry which returned 32.1% over the past year.

Return vs Market: WTR exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

WTRIndustryMarket
7 Day6.2%4.6%1.2%
30 Day8.6%5.8%3.5%
90 Day8.7%5.2%11.7%
1 Year51.8%48.4%39.3%36.8%26.9%24.2%
3 Year83.9%71.2%83.6%72.9%53.0%43.2%
5 Year106.0%82.6%135.9%111.6%75.3%56.0%

Price Volatility Vs. Market

How volatile is Aqua America's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Aqua America undervalued compared to its fair value and its price relative to the market?

65.2x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: WTR ($47.97) is trading above our estimate of fair value ($23.32)

Significantly Below Fair Value: WTR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WTR is poor value based on its PE Ratio (61.8x) compared to the Water Utilities industry average (35.5x).

PE vs Market: WTR is poor value based on its PE Ratio (61.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: WTR is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: WTR is good value based on its PB Ratio (2.8x) compared to the US Water Utilities industry average (2.8x).


Next Steps

Future Growth

How is Aqua America forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

33.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WTR's forecast earnings growth (39.7% per year) is above the savings rate (1.7%).

Earnings vs Market: WTR's earnings (39.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: WTR's revenue (45.4% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: WTR's revenue (45.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WTR's Return on Equity is forecast to be low in 3 years time (9.3%).


Next Steps

Past Performance

How has Aqua America performed over the past 5 years?

-2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WTR has a large one-off loss of $40.2M impacting its September 30 2019 financial results.

Growing Profit Margin: WTR's current net profit margins (18%) are lower than last year (29.8%).


Past Earnings Growth Analysis

Earnings Trend: WTR's earnings have declined by -2.9% per year over the past 5 years.

Accelerating Growth: WTR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WTR had negative earnings growth (-37.1%) over the past year, making it difficult to compare to the Water Utilities industry average (1%).


Return on Equity

High ROE: WTR's Return on Equity (4.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Aqua America's financial position?


Financial Position Analysis

Short Term Liabilities: WTR's short term assets ($2.2B) exceed its short term liabilities ($352.1M).

Long Term Liabilities: WTR's short term assets ($2.2B) do not cover its long term liabilities ($5.1B).


Debt to Equity History and Analysis

Debt Level: WTR's debt to equity ratio (80%) is considered high.

Reducing Debt: WTR's debt to equity ratio has reduced from 102.4% to 80% over the past 5 years.

Debt Coverage: WTR's debt is not well covered by operating cash flow (9.9%).

Interest Coverage: WTR's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet

Inventory Level: WTR has a high level of physical assets or inventory.

Debt Coverage by Assets: WTR's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Aqua America's current dividend yield, its reliability and sustainability?

1.85%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: WTR's dividend (1.95%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: WTR's dividend (1.95%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: WTR's dividends per share have been stable in the past 10 years.

Growing Dividend: WTR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (114.9%), WTR's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WTR's dividends in 3 years are forecast to be covered by earnings (63.1% payout ratio).


Next Steps

Management

What is the CEO of Aqua America's salary, the management and board of directors tenure and is there insider trading?

4.2yrs

Average management tenure


CEO

Chris Franklin (54yo)

4.5yrs

Tenure

US$3,552,705

Compensation

Mr. Christopher H. Franklin, also known as Chris, has been a Director at National Association of Water Companies since March 2018. Mr. Franklin has been the Chief Executive Officer and President at Aqua Am ...


CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD3.55M) is below average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Chris's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.2yrs

Average Tenure

52.5yo

Average Age

Experienced Management: WTR's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

1.7yrs

Average Tenure

62yo

Average Age

Experienced Board: WTR's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$49,96810 Sep 19
Daniel Hilferty
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,152
Max PriceUS$43.38
BuyUS$49,98315 Aug 19
Daniel Hilferty
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,153
Max PriceUS$43.35

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.6%.


Management Team

  • Robert Rubin (56yo)

    Senior VP

    • Tenure: 15.8yrs
  • Chris Franklin (54yo)

    Chairman

    • Tenure: 4.5yrs
    • Compensation: US$3.55m
  • Christopher Luning (51yo)

    Executive VP

    • Tenure: 7.7yrs
    • Compensation: US$878.96k
  • Brian Dingerdissen

    Chief of Staff

    • Tenure: 4.5yrs
  • Rick Fox (57yo)

    Executive VP & COO

    • Tenure: 4.5yrs
    • Compensation: US$1.27m
  • Susan Haindl

    Senior VP & Chief Administrative Officer

    • Tenure: 3.8yrs
  • Dan Schuller (49yo)

    Executive VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$1.20m
  • Whitney Kellett

    Chief Information Officer

    • Tenure: 3.8yrs
  • Matthew Rhodes (41yo)

    Executive VP of Strategy & Corporate Development

    • Tenure: 1.6yrs
    • Compensation: US$1.32m
  • Christina Kelly

    Senior VP & Chief Human Resources Officer

    • Tenure: 1.7yrs

Board Members

  • Nick DeBenedictis (74yo)

    Chairman Emeritus

    • Tenure: 2yrs
    • Compensation: US$182.52k
  • Lee Stewart (70yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$39.92k
  • Chris Womack (61yo)

    Independent Director

    • Tenure: 0.7yrs
  • Dan Hilferty (62yo)

    Lead Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$183.77k
  • Ellen Ruff (70yo)

    Independent Director

    • Tenure: 13.4yrs
    • Compensation: US$169.39k
  • Chris Franklin (54yo)

    Chairman

    • Tenure: 4.5yrs
    • Compensation: US$3.55m
  • Beth Amato (62yo)

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$39.99k
  • Francis Idehen

    Director

    • Tenure: 0.6yrs

Company Information

Aqua America, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Aqua America, Inc.
  • Ticker: WTR
  • Exchange: NYSE
  • Founded: 1886
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: US$10.915b
  • Shares outstanding: 215.84m
  • Website: https://www.aquaamerica.com

Number of Employees


Location

  • Aqua America, Inc.
  • 762 West Lancaster Avenue
  • Bryn Mawr
  • Pennsylvania
  • 19010
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WTRNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
A2ADB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969
WTR *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1969

Biography

Aqua America, Inc., through its subsidiaries, operates regulated utilities that provide water or wastewater services in the United States. It offers water services through operating and maintenance contracts with municipal authorities and other parties. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry; and water and sewer line protection solutions, and repair services to households through third-party. It serves approximately three million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, and Virginia. The company was formerly known as Philadelphia Suburban Corporation and changed its name to Aqua America, Inc. in 2004. Aqua America, Inc. was founded in 1886 and is based in Bryn Mawr, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/20 23:59
End of Day Share Price2020/01/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.