ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
USA - NYSE:WTRG - US29670G1022 - Common Stock
38.31 USD
+0.07 (+0.18%)
38.31 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to WTRG. WTRG was compared to 14 industry peers in the Water Utilities industry. While WTRG has a great profitability rating, there are quite some concerns on its financial health. WTRG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year WTRG was profitable.
WTRG had a positive operating cash flow in the past year.
In the past 5 years WTRG has always been profitable.
Each year in the past 5 years WTRG had a positive operating cash flow.
1.2 Ratios
WTRG's Return On Assets of 3.48% is fine compared to the rest of the industry. WTRG outperforms 71.43% of its industry peers.
WTRG has a better Return On Equity (9.61%) than 71.43% of its industry peers.
WTRG has a better Return On Invested Capital (3.98%) than 64.29% of its industry peers.
WTRG had an Average Return On Invested Capital over the past 3 years of 3.45%. This is in line with the industry average of 4.98%.
The 3 year average ROIC (3.45%) for WTRG is below the current ROIC(3.98%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.48% | ||
| ROE | 9.61% | ||
| ROIC | 3.98% |
ROA(3y)3.07%
ROA(5y)2.85%
ROE(3y)8.9%
ROE(5y)8.22%
ROIC(3y)3.45%
ROIC(5y)3.32%
1.3 Margins
WTRG has a better Profit Margin (27.62%) than 92.86% of its industry peers.
In the last couple of years the Profit Margin of WTRG has grown nicely.
WTRG has a Operating Margin of 38.74%. This is amongst the best in the industry. WTRG outperforms 92.86% of its industry peers.
WTRG's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 84.82%, WTRG belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
In the last couple of years the Gross Margin of WTRG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.74% | ||
| PM (TTM) | 27.62% | ||
| GM | 84.82% |
OM growth 3Y4.21%
OM growth 5Y-1.02%
PM growth 3Y7.49%
PM growth 5Y2.49%
GM growth 3Y1.93%
GM growth 5YN/A
2. Health
2.1 Basic Checks
WTRG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for WTRG has been increased compared to 1 year ago.
Compared to 5 years ago, WTRG has more shares outstanding
WTRG has a worse debt/assets ratio than last year.
2.2 Solvency
WTRG has an Altman-Z score of 0.99. This is a bad value and indicates that WTRG is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of WTRG (0.99) is comparable to the rest of the industry.
WTRG has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
WTRG's Debt to Equity ratio of 1.14 is in line compared to the rest of the industry. WTRG outperforms 42.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.99 |
ROIC/WACC0.53
WACC7.55%
2.3 Liquidity
WTRG has a Current Ratio of 0.73. This is a bad value and indicates that WTRG is not financially healthy enough and could expect problems in meeting its short term obligations.
WTRG's Current ratio of 0.73 is on the low side compared to the rest of the industry. WTRG is outperformed by 64.29% of its industry peers.
WTRG has a Quick Ratio of 0.73. This is a bad value and indicates that WTRG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.58, WTRG is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
WTRG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.63%, which is quite good.
WTRG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.80% yearly.
WTRG shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.70%.
Measured over the past years, WTRG shows a quite strong growth in Revenue. The Revenue has been growing by 18.58% on average per year.
EPS 1Y (TTM)15.63%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%52%
Revenue 1Y (TTM)20.7%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%18.3%
3.2 Future
Based on estimates for the next years, WTRG will show a small growth in Earnings Per Share. The EPS will grow by 4.78% on average per year.
The Revenue is expected to grow by 6.34% on average over the next years.
EPS Next Y0.79%
EPS Next 2Y3.11%
EPS Next 3Y4.7%
EPS Next 5Y4.78%
Revenue Next Year10.21%
Revenue Next 2Y7.77%
Revenue Next 3Y7.24%
Revenue Next 5Y6.34%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.44, which indicates a correct valuation of WTRG.
78.57% of the companies in the same industry are more expensive than WTRG, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.30. WTRG is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.84, WTRG is valued correctly.
Based on the Price/Forward Earnings ratio, WTRG is valued a bit cheaper than the industry average as 78.57% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of WTRG to the average of the S&P500 Index (22.73), we can say WTRG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.44 | ||
| Fwd PE | 16.84 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WTRG is valued a bit cheaper than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of WTRG may justify a higher PE ratio.
PEG (NY)20.7
PEG (5Y)2.11
EPS Next 2Y3.11%
EPS Next 3Y4.7%
5. Dividend
5.1 Amount
WTRG has a Yearly Dividend Yield of 3.47%.
Compared to an average industry Dividend Yield of 3.38, WTRG pays a better dividend. On top of this WTRG pays more dividend than 85.71% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, WTRG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.47% |
5.2 History
The dividend of WTRG has a limited annual growth rate of 5.99%.
WTRG has paid a dividend for at least 10 years, which is a reliable track record.
WTRG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.99%
Div Incr Years33
Div Non Decr Years34
5.3 Sustainability
WTRG pays out 55.62% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of WTRG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.62%
EPS Next 2Y3.11%
EPS Next 3Y4.7%
38.31
+0.07 (+0.18%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners79.32%
Inst Owner Change0.64%
Ins Owners0.19%
Ins Owner Change2.91%
Market Cap10.74B
Analysts88
Price Target47.65 (24.38%)
Short Float %1.44%
Short Ratio2.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.47% |
Yearly Dividend1.26
Dividend Growth(5Y)5.99%
DP55.62%
Div Incr Years33
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)23.2%
Min EPS beat(2)21.86%
Max EPS beat(2)24.54%
EPS beat(4)3
Avg EPS beat(4)11.66%
Min EPS beat(4)-1.24%
Max EPS beat(4)24.54%
EPS beat(8)6
Avg EPS beat(8)8.74%
EPS beat(12)7
Avg EPS beat(12)6.58%
EPS beat(16)8
Avg EPS beat(16)4.2%
Revenue beat(2)2
Avg Revenue beat(2)8.75%
Min Revenue beat(2)8.05%
Max Revenue beat(2)9.45%
Revenue beat(4)3
Avg Revenue beat(4)3%
Min Revenue beat(4)-7.87%
Max Revenue beat(4)9.45%
Revenue beat(8)4
Avg Revenue beat(8)-6.35%
Revenue beat(12)7
Avg Revenue beat(12)-2.14%
Revenue beat(16)10
Avg Revenue beat(16)-0.39%
PT rev (1m)2.95%
PT rev (3m)2.67%
EPS NQ rev (1m)-1.18%
EPS NQ rev (3m)-56.92%
EPS NY rev (1m)0.84%
EPS NY rev (3m)0.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-18.55%
Revenue NY rev (1m)1.17%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.44 | ||
| Fwd PE | 16.84 | ||
| P/S | 4.6 | ||
| P/FCF | N/A | ||
| P/OCF | 11.73 | ||
| P/B | 1.6 | ||
| P/tB | 2.46 | ||
| EV/EBITDA | 14.22 |
EPS(TTM)2.33
EY6.08%
EPS(NY)2.28
Fwd EY5.94%
FCF(TTM)-1.7
FCFYN/A
OCF(TTM)3.27
OCFY8.52%
SpS8.34
BVpS23.96
TBVpS15.6
PEG (NY)20.7
PEG (5Y)2.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.48% | ||
| ROE | 9.61% | ||
| ROCE | 5.05% | ||
| ROIC | 3.98% | ||
| ROICexc | 3.99% | ||
| ROICexgc | 4.59% | ||
| OM | 38.74% | ||
| PM (TTM) | 27.62% | ||
| GM | 84.82% | ||
| FCFM | N/A |
ROA(3y)3.07%
ROA(5y)2.85%
ROE(3y)8.9%
ROE(5y)8.22%
ROIC(3y)3.45%
ROIC(5y)3.32%
ROICexc(3y)3.45%
ROICexc(5y)3.32%
ROICexgc(3y)4.04%
ROICexgc(5y)3.94%
ROCE(3y)4.42%
ROCE(5y)4.24%
ROICexcg growth 3Y-0.42%
ROICexcg growth 5Y1.31%
ROICexc growth 3Y0.8%
ROICexc growth 5Y-1.43%
OM growth 3Y4.21%
OM growth 5Y-1.02%
PM growth 3Y7.49%
PM growth 5Y2.49%
GM growth 3Y1.93%
GM growth 5YN/A
F-Score6
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.89 | ||
| Cap/Depr | 355.49% | ||
| Cap/Sales | 59.6% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.56% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 0.99 |
F-Score6
WACC7.55%
ROIC/WACC0.53
Cap/Depr(3y)346.54%
Cap/Depr(5y)341.43%
Cap/Sales(3y)56.19%
Cap/Sales(5y)56.01%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15.63%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%52%
EPS Next Y0.79%
EPS Next 2Y3.11%
EPS Next 3Y4.7%
EPS Next 5Y4.78%
Revenue 1Y (TTM)20.7%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%18.3%
Revenue Next Year10.21%
Revenue Next 2Y7.77%
Revenue Next 3Y7.24%
Revenue Next 5Y6.34%
EBIT growth 1Y31.8%
EBIT growth 3Y7.93%
EBIT growth 5Y17.37%
EBIT Next Year58.21%
EBIT Next 3Y23.9%
EBIT Next 5Y18.08%
FCF growth 1Y-25.63%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y13.7%
OCF growth 3Y6.12%
OCF growth 5Y17.88%