ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
USA - NYSE:WTRG - US29670G1022 - Common Stock
39.38 USD
+0.81 (+2.1%)
39.38 USD
0 (0%)
Overall WTRG gets a fundamental rating of 4 out of 10. We evaluated WTRG against 14 industry peers in the Water Utilities industry. WTRG has an excellent profitability rating, but there are concerns on its financial health. WTRG is not valued too expensively and it also shows 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.
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's Return On Equity of 9.61% is fine compared to the rest of the industry. WTRG outperforms 71.43% of its industry peers.
The Return On Invested Capital of WTRG (3.98%) is better than 64.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WTRG is in line with the industry average of 4.98%.
The last Return On Invested Capital (3.98%) for WTRG is above the 3 year average (3.45%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 27.62%, WTRG belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
In the last couple of years the Profit Margin of WTRG has grown nicely.
WTRG's Operating Margin of 38.74% is amongst the best of the industry. WTRG outperforms 92.86% of its industry peers.
WTRG's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 84.82%, 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 | 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
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.
WTRG has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that WTRG is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.00, WTRG perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
WTRG has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WTRG (1.14) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1 |
ROIC/WACC0.54
WACC7.36%
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.
Looking at the Quick ratio, with a value of 0.58, WTRG is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.94% over the past year.
WTRG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.10% yearly.
The Revenue has grown by 20.70% in the past year. This is a very strong growth!
The Revenue has been growing by 18.58% on average over the past years. This is quite good.
EPS 1Y (TTM)13.94%
EPS 3Y9.12%
EPS 5Y8.1%
EPS Q2Q%35.71%
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 4.49% on average per year.
The Revenue is expected to grow by 6.34% on average over the next years.
EPS Next Y-0.6%
EPS Next 2Y2.37%
EPS Next 3Y4.19%
EPS Next 5Y4.49%
Revenue Next Year10.21%
Revenue Next 2Y7.77%
Revenue Next 3Y7.22%
Revenue Next 5Y6.34%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
Based on the Price/Earnings ratio of 16.90, the valuation of WTRG can be described as correct.
78.57% of the companies in the same industry are more expensive than WTRG, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of WTRG to the average of the S&P500 Index (27.86), we can say WTRG is valued slightly cheaper.
With a Price/Forward Earnings ratio of 17.32, WTRG is valued on the expensive side.
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 (23.32), we can say WTRG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.9 | ||
| Fwd PE | 17.32 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WTRG is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.29 |
4.3 Compensation for Growth
The excellent profitability rating of WTRG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.09
EPS Next 2Y2.37%
EPS Next 3Y4.19%
5. Dividend
5.1 Amount
WTRG has a Yearly Dividend Yield of 3.55%. Purely for dividend investing, there may be better candidates out there.
WTRG's Dividend Yield is a higher than the industry average which is at 3.44.
WTRG's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.55% |
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
55.62% 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.
DP55.62%
EPS Next 2Y2.37%
EPS Next 3Y4.19%
39.38
+0.81 (+2.1%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners82.39%
Inst Owner Change0.63%
Ins Owners0.19%
Ins Owner Change2.91%
Market Cap11.04B
Analysts88.57
Price Target47.6 (20.87%)
Short Float %1.79%
Short Ratio2.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.55% |
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)5
Avg EPS beat(8)7.37%
EPS beat(12)6
Avg EPS beat(12)5.67%
EPS beat(16)7
Avg EPS beat(16)3.51%
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)3
Avg Revenue beat(8)-7.09%
Revenue beat(12)6
Avg Revenue beat(12)-2.64%
Revenue beat(16)9
Avg Revenue beat(16)-0.77%
PT rev (1m)0%
PT rev (3m)2.11%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.82%
EPS NY rev (1m)0%
EPS NY rev (3m)0.82%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.61%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.9 | ||
| Fwd PE | 17.32 | ||
| P/S | 4.72 | ||
| P/FCF | N/A | ||
| P/OCF | 12.06 | ||
| P/B | 1.64 | ||
| P/tB | 2.52 | ||
| EV/EBITDA | 14.29 |
EPS(TTM)2.33
EY5.92%
EPS(NY)2.27
Fwd EY5.78%
FCF(TTM)-1.7
FCFYN/A
OCF(TTM)3.27
OCFY8.29%
SpS8.34
BVpS23.96
TBVpS15.6
PEG (NY)N/A
PEG (5Y)2.09
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 | 1 |
F-Score6
WACC7.36%
ROIC/WACC0.54
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)13.94%
EPS 3Y9.12%
EPS 5Y8.1%
EPS Q2Q%35.71%
EPS Next Y-0.6%
EPS Next 2Y2.37%
EPS Next 3Y4.19%
EPS Next 5Y4.49%
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 3Y7.22%
Revenue Next 5Y6.34%
EBIT growth 1Y31.8%
EBIT growth 3Y7.93%
EBIT growth 5Y17.37%
EBIT Next Year58.93%
EBIT Next 3Y23.72%
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%