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 has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, WTRG is valued expensive at the moment.
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.
WTRG had positive earnings in each of the past 5 years.
WTRG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WTRG (3.30%) is comparable to the rest of the industry.
WTRG's Return On Equity of 9.60% is in line compared to the rest of the industry. WTRG outperforms 42.86% of its industry peers.
The Return On Invested Capital of WTRG (3.47%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for WTRG is in line with the industry average of 5.27%.
The last Return On Invested Capital (3.47%) for WTRG is above the 3 year average (3.45%), which is a sign of increasing profitability.
| 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
With an excellent Profit Margin value of 28.54%, WTRG belongs to the best 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.
With a decent Operating Margin value of 36.32%, WTRG is doing good in the industry, outperforming 71.43% 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 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WTRG 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.
WTRG has a worse debt/assets ratio than last year.
2.2 Solvency
WTRG has an Altman-Z score of 0.94. This is a bad value and indicates that WTRG is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of WTRG (0.94) is worse than 64.29% of its industry peers.
A Debt/Equity ratio of 1.22 is on the high side and indicates that WTRG has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.22, WTRG is in line with its industry, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.94 |
ROIC/WACC0.44
WACC7.81%
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.
Looking at the Current ratio, with a value of 0.50, WTRG is doing worse than 85.71% of the companies in the same industry.
WTRG has a Quick 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.
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.
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 small growth in Revenue. The Revenue has grown by 1.57% in the last year.
The Revenue has been growing by 18.58% on average over the past years. This is quite good.
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
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 7.13% on average over the next years.
EPS Next Y-0.11%
EPS Next 2Y2.94%
EPS Next 3Y4.29%
EPS Next 5Y4.89%
Revenue Next Year7.57%
Revenue Next 2Y7.34%
Revenue Next 3Y8%
Revenue Next 5Y7.13%
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
With a Price/Earnings ratio of 18.94, WTRG is valued on the expensive side.
Based on the Price/Earnings ratio, WTRG is valued a bit cheaper than 71.43% of the companies in the same industry.
When comparing the Price/Earnings ratio of WTRG to the average of the S&P500 Index (28.29), we can say WTRG is valued slightly cheaper.
With a Price/Forward Earnings ratio of 18.96, WTRG is valued on the expensive side.
78.57% 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 21.08, WTRG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.94 | ||
| Fwd PE | 18.96 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WTRG is valued a bit cheaper than 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.56 |
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)2.43
EPS Next 2Y2.94%
EPS Next 3Y4.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.40%, 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 3.45. 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 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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
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 2Y2.94%
EPS Next 3Y4.29%
40.53
+0.48 (+1.2%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners84.72%
Inst Owner Change0%
Ins Owners0.2%
Ins Owner Change19.04%
Market Cap11.17B
Analysts86.25
Price Target46.03 (13.57%)
Short Float %1.83%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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)0.28%
PT rev (3m)-0.82%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.84%
EPS NY rev (1m)-0.81%
EPS NY rev (3m)-0.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.72%
Revenue NY rev (1m)-2.12%
Revenue NY rev (3m)-1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.94 | ||
| Fwd PE | 18.96 | ||
| P/S | 5.35 | ||
| P/FCF | N/A | ||
| P/OCF | 14.5 | ||
| P/B | 1.8 | ||
| P/tB | 2.9 | ||
| EV/EBITDA | 16.56 |
EPS(TTM)2.14
EY5.28%
EPS(NY)2.14
Fwd EY5.27%
FCF(TTM)-2.03
FCFYN/A
OCF(TTM)2.8
OCFY6.9%
SpS7.57
BVpS22.5
TBVpS13.99
PEG (NY)N/A
PEG (5Y)2.43
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 | 0.94 |
F-Score5
WACC7.81%
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-0.11%
EPS Next 2Y2.94%
EPS Next 3Y4.29%
EPS Next 5Y4.89%
Revenue 1Y (TTM)1.57%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%26.07%
Revenue Next Year7.57%
Revenue Next 2Y7.34%
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%