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No. of Recommendations: 3
http://www.businessweek.com/investor/content/sep2004/pi2004098_4414_pi010.htm

Aqua America (WTR ): Reiterates 4 STARS (accumulate)
Analyst: Stewart Scharf

We expect the company to further expand via acquisitions and rate hikes, while operating and maintenance expense falls by 100 to 150 basis points, from nearly 42% of revenues, on synergies within four years. We see annual dividend hikes; the December, 2004, dividend was increased by 8%. Aqua currently yields 2.4%, compared to 1.2% for S&P's MidCap 400. At 21 times our 95-cent 2005 EPS estimate, the shares trade at a modest premium to peers. We believe the stock deserves a forward p-e above historical averages, and are applying a p-e of 26 to our 2005 EPS projection, thereby raising our 12-month target price to $25 from $23.
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