Aqua America: The Right DRIP

03/27/2014 7:00 am EST

Focus: STOCKS

Vita Nelson

Founding Publisher and Editor, Moneypaper

After a series of sell-offs in January and February, the stocks rebounded; but that good news should not cause us to abandon a logical approach to our investing decisions, explains Vita Nelson, dividend expert and editor of MoneyPaper.

Substituting emotion for reason usually leads us to make poor decisions that will cost us money.

Whether stock prices are at high or low extremes—or somewhere in the middle—we know from experience that following a dollar-cost averaging approach will keep us from investing too much or too little at any given moment.

That should keep us headed in the right direction, no matter what emotions are ruling other people.

Our latest featured dividend reinvestment idea is Aqua America (WTR). Founded in 1968, and headquartered in Bryn Mawr, Pennsylvania, Aqua America operates regulated utilities that provide water or wastewater services in the United States.

It serves residential, commercial, fire protection, industrial, and other utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, and Georgia.

It also provides operating and maintenance contracts to municipal authorities and other parties, sludge hauling, grease, back-flow prevention, and non-utility raw water supply services for firms in the natural gas and oil drilling industry.

Consensus estimates call for the company to earn about $1.21 per share this year and $1.26 in 2015, compared with $1.16 last year. The dividend, which has been increased for 22 consecutive years, provides a yield of 2.4%.

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