ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
NYSE:WTRG - New York Stock Exchange, Inc. - US29670G1022 - Common Stock - Currency: USD
WTRG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
WTRG had positive earnings in the past year.
In the past year WTRG had a positive cash flow from operations.
Each year in the past 5 years WTRG has been profitable.
In the past 5 years WTRG always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WTRG (3.35%) is better than 64.29% of its industry peers.
Looking at the Return On Equity, with a value of 9.49%, WTRG is in line with its industry, outperforming 57.14% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.87%, WTRG is in the better half of the industry, outperforming 64.29% of the companies in the same 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 5.08%.
The last Return On Invested Capital (3.87%) for WTRG is above the 3 year average (3.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 9.49% | ||
| ROIC | 3.87% |
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's Profit Margin of 27.17% is amongst the best of the industry. WTRG outperforms 92.86% of its industry peers.
In the last couple of years the Profit Margin of WTRG has grown nicely.
With an excellent Operating Margin value of 38.35%, WTRG belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
WTRG's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 85.30%, WTRG belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
WTRG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.35% | ||
| PM (TTM) | 27.17% | ||
| GM | 85.3% |
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.
WTRG has more shares outstanding than it did 5 years ago.
The debt/assets ratio for WTRG is higher compared to a year ago.
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.
Looking at the Altman-Z score, with a value of 0.95, WTRG is in line with its industry, outperforming 42.86% of the companies in the same industry.
A Debt/Equity ratio of 1.18 is on the high side and indicates that WTRG has dependencies on debt financing.
WTRG has a Debt to Equity ratio (1.18) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACC0.43
WACC9.03%
2.3 Liquidity
A Current Ratio of 0.65 indicates that WTRG may have some problems paying its short term obligations.
With a Current ratio value of 0.65, WTRG is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
WTRG has a Quick Ratio of 0.65. 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 0.57, WTRG is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
WTRG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.51%.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
The Revenue has grown by 16.41% in the past year. This is quite good.
WTRG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 18.58% yearly.
EPS 1Y (TTM)4.51%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%6.19%
Revenue 1Y (TTM)16.41%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%28.03%
3.2 Future
WTRG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.89% yearly.
The Revenue is expected to grow by 6.80% on average over the next years.
EPS Next Y-0.02%
EPS Next 2Y3.15%
EPS Next 3Y4.61%
EPS Next 5Y4.89%
Revenue Next Year9.34%
Revenue Next 2Y7.93%
Revenue Next 3Y8%
Revenue Next 5Y6.8%
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.
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 16.72, which indicates a correct valuation of WTRG.
Based on the Price/Earnings ratio, WTRG is valued cheaper than 85.71% of the companies in the same industry.
WTRG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.28.
A Price/Forward Earnings ratio of 16.15 indicates a correct valuation of WTRG.
WTRG's Price/Forward Earnings ratio is rather cheap when compared to the industry. WTRG is cheaper than 85.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WTRG to the average of the S&P500 Index (21.76), we can say WTRG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.72 | ||
| Fwd PE | 16.15 |
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 | 14.5 |
4.3 Compensation for Growth
The excellent profitability rating of WTRG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.14
EPS Next 2Y3.15%
EPS Next 3Y4.61%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.52%, 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 3.44. 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 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.99%
Div Incr Years33
Div Non Decr Years34
5.3 Sustainability
57.38% of the earnings are spent on dividend by WTRG. 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.
DP57.38%
EPS Next 2Y3.15%
EPS Next 3Y4.61%
36.78
-0.33 (-0.89%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners79.16%
Inst Owner Change1.5%
Ins Owners0.19%
Ins Owner Change22.09%
Market Cap10.31B
Analysts86.25
Price Target46.67 (26.89%)
Short Float %1.59%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
Yearly Dividend1.26
Dividend Growth(5Y)5.99%
DP57.38%
Div Incr Years33
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)11.65%
Min EPS beat(2)-1.24%
Max EPS beat(2)24.54%
EPS beat(4)3
Avg EPS beat(4)6.57%
Min EPS beat(4)-1.24%
Max EPS beat(4)24.54%
EPS beat(8)5
Avg EPS beat(8)5.76%
EPS beat(12)6
Avg EPS beat(12)4.72%
EPS beat(16)8
Avg EPS beat(16)4.43%
Revenue beat(2)1
Avg Revenue beat(2)0.79%
Min Revenue beat(2)-7.87%
Max Revenue beat(2)9.45%
Revenue beat(4)3
Avg Revenue beat(4)1.57%
Min Revenue beat(4)-7.87%
Max Revenue beat(4)9.45%
Revenue beat(8)3
Avg Revenue beat(8)-8.44%
Revenue beat(12)7
Avg Revenue beat(12)-2.33%
Revenue beat(16)10
Avg Revenue beat(16)-0.63%
PT rev (1m)0.55%
PT rev (3m)1.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9.28%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.72%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.72 | ||
| Fwd PE | 16.15 | ||
| P/S | 4.57 | ||
| P/FCF | N/A | ||
| P/OCF | 12.44 | ||
| P/B | 1.6 | ||
| P/tB | 2.5 | ||
| EV/EBITDA | 14.5 |
EPS(TTM)2.2
EY5.98%
EPS(NY)2.28
Fwd EY6.19%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)2.96
OCFY8.04%
SpS8.05
BVpS23.04
TBVpS14.68
PEG (NY)N/A
PEG (5Y)2.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 9.49% | ||
| ROCE | 4.93% | ||
| ROIC | 3.87% | ||
| ROICexc | 3.88% | ||
| ROICexgc | 4.47% | ||
| OM | 38.35% | ||
| PM (TTM) | 27.17% | ||
| GM | 85.3% | ||
| 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 | 1.18 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 6.12 | ||
| Cap/Depr | 355.37% | ||
| Cap/Sales | 59.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.6% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.57 | ||
| Altman-Z | 0.95 |
F-Score5
WACC9.03%
ROIC/WACC0.43
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)4.51%
EPS 3Y8.62%
EPS 5Y7.8%
EPS Q2Q%6.19%
EPS Next Y-0.02%
EPS Next 2Y3.15%
EPS Next 3Y4.61%
EPS Next 5Y4.89%
Revenue 1Y (TTM)16.41%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%28.03%
Revenue Next Year9.34%
Revenue Next 2Y7.93%
Revenue Next 3Y8%
Revenue Next 5Y6.8%
EBIT growth 1Y24.18%
EBIT growth 3Y7.93%
EBIT growth 5Y17.37%
EBIT Next Year57.36%
EBIT Next 3Y23.93%
EBIT Next 5Y18.15%
FCF growth 1Y-19.98%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y19.94%
OCF growth 3Y6.12%
OCF growth 5Y17.88%