Investing Topics: Mergers & Acquisitions

I’ve personally owned Aqua America (NYSE: WTR) since it was Philadelphia Suburban. And thanks to the wealth-compounding power of dividend reinvestment, my Aqua shares are worth almost 14 times what I initially put in.

Trial testimony has concluded in the court challenge of the proposed merger of two US wireless giants and we expect an early 2020 close. The real issue is whether management will be able to deliver on lofty expectations.

The flow of mergers of entire utility companies has dried up, relative to the heady pace of a few years ago. But management teams are still finding plenty of assets to buy and sell.

Can the sum of the parts actually be greater than the whole? Shareholders of AT&T Inc (NYSE: T) will get a chance to find out, now that activist investor Paul Singer’s Elliott Management has taken a $3.2 billion stake in the communications giant.

Barron's is piling on with an article concerning AT&T Inc’s (NYSE: T) loss of DirectTV subscribers, following up on a cover story critiquing the telecom giant's acquisition of Time Warner last year. Investors, however, saw the situation quite differently, pushing the stock to solid gains on earnings day, despite media mono-focus on the pay television unit.

Aqua America (NYSE: WTR) is closing in on its proposed acquisition of Pennsylvania-based Peoples Gas, positioning the companies' merger for a late third-quarter close.

Get big or go home: The "Big Four" will likely soon become the "Big Three."

Fair value is always in the eye of the beholder. But energy investors are best advised to follow our one simple rule for picking takeover targets: Only buy companies with the strength to thrive on their own.