ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
NYSE:WTRG - New York Stock Exchange, Inc. - US29670G1022 - Common Stock - Currency: USD
Overall WTRG gets a fundamental rating of 4 out of 10. We evaluated WTRG against 14 industry peers in the Water Utilities industry. While WTRG belongs to the best of the industry regarding profitability, there are 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.
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
Looking at the Return On Assets, with a value of 3.35%, WTRG is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
WTRG's Return On Equity of 9.49% is in line compared to the rest of the industry. WTRG outperforms 57.14% of its industry peers.
WTRG has a Return On Invested Capital of 3.87%. This is in the better half of the industry: WTRG outperforms 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 5.08%.
The 3 year average ROIC (3.45%) for WTRG is below the current ROIC(3.87%), indicating increased profibility in the last year.
| 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.
WTRG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 38.35%, 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 Operating Margin of WTRG has remained more or less at the same level.
WTRG has a Gross Margin of 85.30%. This is amongst the best in the industry. WTRG outperforms 85.71% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WTRG is destroying value.
WTRG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, WTRG has more shares outstanding
The debt/assets ratio for WTRG is higher compared to a year ago.
2.2 Solvency
WTRG has an Altman-Z score of 0.95. This is a bad value and indicates that WTRG is not financially healthy and even has some risk of bankruptcy.
WTRG's Altman-Z score of 0.95 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.
With a Debt to Equity ratio value of 1.18, WTRG perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.18 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.95 |
ROIC/WACC0.49
WACC7.85%
2.3 Liquidity
WTRG has a Current 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.
WTRG has a worse Current ratio (0.65) than 71.43% of its industry peers.
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.
With a Quick ratio value of 0.57, 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 | 0.65 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.51% over the past year.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
Looking at the last year, WTRG shows a quite strong growth in Revenue. The Revenue has grown by 16.41% in the last year.
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
Based on estimates for the next years, WTRG will show a small growth in Earnings Per Share. The EPS will grow by 4.89% on average per year.
Based on estimates for the next years, WTRG will show a small growth in Revenue. The Revenue will grow by 6.80% on average per year.
EPS Next Y-0.05%
EPS Next 2Y3.14%
EPS Next 3Y4.61%
EPS Next 5Y4.89%
Revenue Next Year8.48%
Revenue Next 2Y7.41%
Revenue Next 3Y7.18%
Revenue Next 5Y6.8%
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
Based on the Price/Earnings ratio of 16.97, the valuation of WTRG can be described as correct.
Based on the Price/Earnings ratio, WTRG is valued cheaper than 85.71% of the companies in the same industry.
WTRG is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 16.40 indicates a correct valuation of WTRG.
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 (21.76), we can say WTRG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.97 | ||
| Fwd PE | 16.4 |
4.2 Price Multiples
71.43% of the companies in the same industry are more expensive than WTRG, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.55 |
4.3 Compensation for Growth
WTRG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.18
EPS Next 2Y3.14%
EPS Next 3Y4.61%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.47%, WTRG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.32, WTRG pays a better dividend. On top of this WTRG pays more dividend than 85.71% of the companies listed in the same industry.
WTRG's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| 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
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 2Y3.14%
EPS Next 3Y4.61%
37.33
-0.21 (-0.56%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners79.16%
Inst Owner Change0.04%
Ins Owners0.19%
Ins Owner Change21.56%
Market Cap10.47B
Analysts86.25
Price Target46.67 (25.02%)
Short Float %1.59%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.47% |
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%
PT rev (3m)1.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9.28%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.09%
Revenue NY rev (1m)-0.79%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.97 | ||
| Fwd PE | 16.4 | ||
| P/S | 4.64 | ||
| P/FCF | N/A | ||
| P/OCF | 12.62 | ||
| P/B | 1.62 | ||
| P/tB | 2.54 | ||
| EV/EBITDA | 14.55 |
EPS(TTM)2.2
EY5.89%
EPS(NY)2.28
Fwd EY6.1%
FCF(TTM)-1.85
FCFYN/A
OCF(TTM)2.96
OCFY7.92%
SpS8.05
BVpS23.04
TBVpS14.68
PEG (NY)N/A
PEG (5Y)2.18
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
WACC7.85%
ROIC/WACC0.49
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-0.05%
EPS Next 2Y3.14%
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 Year8.48%
Revenue Next 2Y7.41%
Revenue Next 3Y7.18%
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%