ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
NYSE:WTRG - New York Stock Exchange, Inc. - US29670G1022 - Common Stock - Currency: USD
Taking everything into account, WTRG scores 4 out of 10 in our fundamental rating. 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 is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WTRG was profitable.
In the past year WTRG had a positive cash flow from operations.
Each year in the past 5 years WTRG has been profitable.
Each year in the past 5 years WTRG had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.30%, WTRG is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
WTRG has a Return On Equity (9.60%) which is in line with its industry peers.
The Return On Invested Capital of WTRG (3.47%) is comparable to the rest of the industry.
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 5.12%.
The 3 year average ROIC (3.45%) for WTRG is below the current ROIC(3.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.3% | ||
| ROE | 9.6% | ||
| ROIC | 3.47% |
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 (28.54%) than 92.86% of its industry peers.
WTRG's Profit Margin has improved in the last couple of years.
The Operating Margin of WTRG (36.32%) is better than 71.43% of its industry peers.
In the last couple of years the Operating Margin of WTRG has remained more or less at the same level.
Looking at the Gross Margin, with a value of 86.72%, WTRG belongs to the top 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 | 36.32% | ||
| PM (TTM) | 28.54% | ||
| GM | 86.72% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WTRG is destroying value.
WTRG has more shares outstanding than it did 1 year ago.
WTRG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, WTRG has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.95, we must say that WTRG is in the distress zone and has some risk of bankruptcy.
WTRG has a Altman-Z score (0.95) which is comparable to the rest of the industry.
WTRG has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
WTRG has a Debt to Equity ratio (1.22) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACC0.44
WACC7.87%
2.3 Liquidity
WTRG has a Current Ratio of 0.50. 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 0.50 is on the low side compared to the rest of the industry. WTRG is outperformed by 78.57% of its industry peers.
A Quick Ratio of 0.40 indicates that WTRG may have some problems paying its short term obligations.
With a Quick ratio value of 0.40, WTRG is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.4 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.36% over the past year.
WTRG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.80% yearly.
The Revenue has been growing slightly by 1.57% in the past year.
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)15.36%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%35.35%
Revenue 1Y (TTM)1.57%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%26.07%
3.2 Future
The Earnings Per Share is expected to grow by 4.89% on average over the next years.
The Revenue is expected to grow by 7.13% on average over the next years.
EPS Next Y-0.14%
EPS Next 2Y2.97%
EPS Next 3Y4.56%
EPS Next 5Y4.89%
Revenue Next Year8.71%
Revenue Next 2Y7.83%
Revenue Next 3Y8%
Revenue Next 5Y7.13%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.25, WTRG is valued on the expensive side.
71.43% of the companies in the same industry are more expensive than WTRG, based on the Price/Earnings ratio.
WTRG is valuated rather cheaply when we compare the Price/Earnings ratio to 24.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 19.28 indicates a rather expensive valuation of WTRG.
71.43% of the companies in the same industry are more expensive than WTRG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.42, WTRG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.25 | ||
| Fwd PE | 19.28 |
4.2 Price Multiples
WTRG's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.77 |
4.3 Compensation for Growth
WTRG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.47
EPS Next 2Y2.97%
EPS Next 3Y4.56%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.20%, WTRG has a reasonable but not impressive dividend return.
WTRG's Dividend Yield is rather good when compared to the industry average which is at 3.31. WTRG pays more dividend than 85.71% of the companies in the same industry.
WTRG's Dividend Yield is a higher than the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.2% |
5.2 History
The dividend of WTRG has a limited annual growth rate of 5.99%.
WTRG has been paying a dividend for at least 10 years, so it has 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
58.19% of the earnings are spent on dividend by WTRG. This is a bit on the high side, but may be sustainable.
WTRG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP58.19%
EPS Next 2Y2.97%
EPS Next 3Y4.56%
NYSE:WTRG (5/7/2025, 10:44:56 AM)
41.19
-0.2 (-0.48%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners84.72%
Inst Owner Change-0.29%
Ins Owners0.2%
Ins Owner Change19.04%
Market Cap11.35B
Analysts86.25
Price Target46.41 (12.67%)
Short Float %1.96%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.2% |
Yearly Dividend1.26
Dividend Growth(5Y)5.99%
DP58.19%
Div Incr Years33
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.12%
Min EPS beat(2)-1.24%
Max EPS beat(2)1.49%
EPS beat(4)3
Avg EPS beat(4)6.31%
Min EPS beat(4)-1.24%
Max EPS beat(4)23.5%
EPS beat(8)4
Avg EPS beat(8)2.68%
EPS beat(12)6
Avg EPS beat(12)2.68%
EPS beat(16)8
Avg EPS beat(16)3.33%
Revenue beat(2)1
Avg Revenue beat(2)-2.76%
Min Revenue beat(2)-7.87%
Max Revenue beat(2)2.35%
Revenue beat(4)2
Avg Revenue beat(4)-5.79%
Min Revenue beat(4)-20%
Max Revenue beat(4)2.35%
Revenue beat(8)3
Avg Revenue beat(8)-9.09%
Revenue beat(12)7
Avg Revenue beat(12)-2.19%
Revenue beat(16)9
Avg Revenue beat(16)-2.03%
PT rev (1m)0.83%
PT rev (3m)3.16%
EPS NQ rev (1m)2.61%
EPS NQ rev (3m)2.69%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.72%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)-0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.25 | ||
| Fwd PE | 19.28 | ||
| P/S | 5.44 | ||
| P/FCF | N/A | ||
| P/OCF | 14.73 | ||
| P/B | 1.83 | ||
| P/tB | 2.94 | ||
| EV/EBITDA | 16.77 |
EPS(TTM)2.14
EY5.2%
EPS(NY)2.14
Fwd EY5.19%
FCF(TTM)-2.03
FCFYN/A
OCF(TTM)2.8
OCFY6.79%
SpS7.57
BVpS22.5
TBVpS13.99
PEG (NY)N/A
PEG (5Y)2.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.3% | ||
| ROE | 9.6% | ||
| ROCE | 4.44% | ||
| ROIC | 3.47% | ||
| ROICexc | 3.47% | ||
| ROICexgc | 4.02% | ||
| OM | 36.32% | ||
| PM (TTM) | 28.54% | ||
| GM | 86.72% | ||
| 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-Score5
Asset Turnover0.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 6.7 | ||
| Cap/Depr | 359.83% | ||
| Cap/Sales | 63.74% | ||
| Interest Coverage | 2.75 | ||
| Cash Conversion | 68.34% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.4 | ||
| Altman-Z | 0.95 |
F-Score5
WACC7.87%
ROIC/WACC0.44
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)15.36%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%35.35%
EPS Next Y-0.14%
EPS Next 2Y2.97%
EPS Next 3Y4.56%
EPS Next 5Y4.89%
Revenue 1Y (TTM)1.57%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%26.07%
Revenue Next Year8.71%
Revenue Next 2Y7.83%
Revenue Next 3Y8%
Revenue Next 5Y7.13%
EBIT growth 1Y9.47%
EBIT growth 3Y7.93%
EBIT growth 5Y17.37%
EBIT Next Year58.21%
EBIT Next 3Y25.56%
EBIT Next 5Y18.18%
FCF growth 1Y-110.69%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-17.49%
OCF growth 3Y6.12%
OCF growth 5Y17.88%