ESSENTIAL UTILITIES INC (WTRG)
US29670G1022 - Common Stock
We assign a fundamental rating of 4 out of 10 to WTRG. WTRG was compared to 14 industry peers in the Water Utilities industry. WTRG has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, WTRG is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WTRG had positive earnings in the past year.
WTRG had a positive operating cash flow in the past year.
In the past 5 years WTRG has always been profitable.
In the past 5 years WTRG always reported a positive cash flow from operatings.
1.2 Ratios
WTRG's Return On Assets of 2.96% is in line compared to the rest of the industry. WTRG outperforms 50.00% of its industry peers.
WTRG has a Return On Equity (8.45%) which is comparable to the rest of the industry.
WTRG has a better Return On Invested Capital (3.37%) than 64.29% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WTRG is in line with the industry average of 5.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.96% | ||
| ROE | 8.45% | ||
| ROIC | 3.37% |
ROA(3y)2.95%
ROA(5y)2.67%
ROE(3y)8.48%
ROE(5y)7.46%
ROIC(3y)3.42%
ROIC(5y)3.22%
1.3 Margins
WTRG's Profit Margin of 24.26% is amongst the best of the industry. WTRG outperforms 85.71% of its industry peers.
WTRG's Profit Margin has been stable in the last couple of years.
The Operating Margin of WTRG (33.70%) is better than 85.71% of its industry peers.
In the last couple of years the Operating Margin of WTRG has declined.
WTRG's Gross Margin of 82.85% is amongst the best of the industry. WTRG outperforms 85.71% of its industry peers.
In the last couple of years the Gross Margin of WTRG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.7% | ||
| PM (TTM) | 24.26% | ||
| GM | 82.85% |
OM growth 3Y1.01%
OM growth 5Y-2.66%
PM growth 3Y7.6%
PM growth 5Y1.15%
GM growth 3Y-2.24%
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.
Compared to 1 year ago, WTRG has more shares outstanding
WTRG has more shares outstanding than it did 5 years ago.
WTRG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.96, we must say that WTRG is in the distress zone and has some risk of bankruptcy.
WTRG's Altman-Z score of 0.96 is in line compared to the rest of the industry. WTRG outperforms 42.86% of its industry peers.
A Debt/Equity ratio of 1.18 is on the high side and indicates that WTRG has dependencies on debt financing.
WTRG has a worse Debt to Equity ratio (1.18) than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.96 |
ROIC/WACC0.44
WACC7.59%
2.3 Liquidity
WTRG has a Current Ratio of 0.62. 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 has a Current ratio of 0.62. This is in the lower half of the industry: WTRG underperforms 78.57% of its industry peers.
WTRG has a Quick Ratio of 0.62. 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 Quick ratio of 0.48 is on the low side compared to the rest of the industry. WTRG is outperformed by 92.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.62 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
WTRG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.80%.
Measured over the past 5 years, WTRG shows a small growth in Earnings Per Share. The EPS has been growing by 5.64% on average per year.
WTRG shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.24%.
Measured over the past years, WTRG shows a quite strong growth in Revenue. The Revenue has been growing by 19.63% on average per year.
EPS 1Y (TTM)4.8%
EPS 3Y5.49%
EPS 5Y5.64%
EPS growth Q2Q12.5%
Revenue 1Y (TTM)-10.24%
Revenue growth 3Y11.98%
Revenue growth 5Y19.63%
Revenue growth Q2Q-32.03%
3.2 Future
WTRG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.83% yearly.
The Revenue is expected to grow by 7.29% on average over the next years.
EPS Next Y9.15%
EPS Next 2Y7.97%
EPS Next 3Y7.07%
EPS Next 5Y6.83%
Revenue Next Year2.47%
Revenue Next 2Y4.53%
Revenue Next 3Y6.81%
Revenue Next 5Y7.29%
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 accelerating.
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
A Price/Earnings ratio of 20.83 indicates a rather expensive valuation of WTRG.
Based on the Price/Earnings ratio, WTRG is valued cheaper than 85.71% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.31. WTRG is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 19.14, WTRG is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WTRG indicates a rather cheap valuation: WTRG is cheaper than 85.71% of the companies listed in the same industry.
WTRG's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.48.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.83 | ||
| Fwd PE | 19.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WTRG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.9 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WTRG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.28
PEG (5Y)3.69
EPS Next 2Y7.97%
EPS Next 3Y7.07%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.17%, 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 3.69. WTRG pays more dividend than 92.86% of the companies in the same industry.
WTRG's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
5.2 History
The dividend of WTRG is nicely growing with an annual growth rate of 6.86%!
WTRG has paid a dividend for at least 10 years, which is a reliable track record.
WTRG has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)6.86%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
WTRG pays out 63.59% of its income as dividend. This is not a sustainable payout ratio.
WTRG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP63.59%
EPS Next 2Y7.97%
EPS Next 3Y7.07%
ESSENTIAL UTILITIES INC
NYSE:WTRG (5/10/2024, 9:06:08 AM)
38.75
-0.03 (-0.08%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap10.60B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.83 | ||
| Fwd PE | 19.14 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.28
PEG (5Y)3.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.96% | ||
| ROE | 8.45% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 33.7% | ||
| PM (TTM) | 24.26% | ||
| GM | 82.85% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.62 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)4.8%
EPS 3Y5.49%
EPS 5Y
EPS growth Q2Q
EPS Next Y9.15%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-10.24%
Revenue growth 3Y11.98%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y