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 belongs to the best of the industry regarding profitability, 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
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
WTRG has a Return On Assets (3.30%) which 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 50.00% of its industry peers.
WTRG has a Return On Invested Capital (3.47%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for WTRG is below the industry average of 5.69%.
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
WTRG has a better Profit Margin (28.54%) than 85.71% 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 36.32%, WTRG is in the better half of the industry, outperforming 71.43% 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's Gross Margin of 86.72% is amongst the best of the industry. WTRG outperforms 92.86% of its industry peers.
WTRG's Gross Margin has improved in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WTRG is destroying value.
Compared to 1 year ago, WTRG has more shares outstanding
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 0.90, we must say that WTRG is in the distress zone and has some risk of bankruptcy.
WTRG has a Altman-Z score of 0.90. This is comparable to the rest of the industry: WTRG outperforms 42.86% 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.
WTRG has a Debt to Equity ratio (1.22) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.9 |
ROIC/WACC0.47
WACC7.33%
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.
With a Current ratio value of 0.50, WTRG is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
A Quick Ratio of 0.40 indicates that WTRG may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.40, WTRG is doing worse than 85.71% of the companies in the same industry.
| 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 impressive 38.01% over the past year.
The Earnings Per Share has been growing by 11.73% on average over the past years. This is quite good.
WTRG shows a small growth in Revenue. In the last year, the Revenue has grown by 1.57%.
The Revenue has been growing by 18.58% on average over the past years. This is quite good.
EPS 1Y (TTM)38.01%
EPS 3Y15.3%
EPS 5Y11.73%
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 1.28% yearly.
Based on estimates for the next years, WTRG will show a small growth in Revenue. The Revenue will grow by 7.85% on average per year.
EPS Next Y-15.82%
EPS Next 2Y-5.84%
EPS Next 3Y-1.58%
EPS Next 5Y1.28%
Revenue Next Year9.3%
Revenue Next 2Y7.47%
Revenue Next 3Y9.05%
Revenue Next 5Y7.85%
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 15.27, 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 29.75.
With a Price/Forward Earnings ratio of 18.14, 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 22.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.27 | ||
| Fwd PE | 18.14 |
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 | 15.91 |
4.3 Compensation for Growth
The decent profitability rating of WTRG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.3
EPS Next 2Y-5.84%
EPS Next 3Y-1.58%
5. Dividend
5.1 Amount
WTRG has a Yearly Dividend Yield of 3.43%. Purely for dividend investing, there may be better candidates out there.
WTRG's Dividend Yield is rather good when compared to the industry average which is at 3.42. 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 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
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
WTRG pays out 58.19% of its income as dividend. 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.
DP58.19%
EPS Next 2Y-5.84%
EPS Next 3Y-1.58%
39.1
+1.12 (+2.95%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners84.72%
Inst Owner Change2.84%
Ins Owners0.2%
Ins Owner Change20.13%
Market Cap10.74B
Analysts86.25
Price Target45.52 (16.42%)
Short Float %1.7%
Short Ratio3.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
Yearly Dividend1.26
Dividend Growth(5Y)5.99%
DP58.19%
Div Incr Years33
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.15%
Min EPS beat(2)-15.06%
Max EPS beat(2)-1.24%
EPS beat(4)2
Avg EPS beat(4)2.17%
Min EPS beat(4)-15.06%
Max EPS beat(4)23.5%
EPS beat(8)3
Avg EPS beat(8)0.61%
EPS beat(12)5
Avg EPS beat(12)1.3%
EPS beat(16)7
Avg EPS beat(16)2.29%
Revenue beat(2)0
Avg Revenue beat(2)-11%
Min Revenue beat(2)-14.13%
Max Revenue beat(2)-7.87%
Revenue beat(4)1
Avg Revenue beat(4)-9.91%
Min Revenue beat(4)-20%
Max Revenue beat(4)2.35%
Revenue beat(8)2
Avg Revenue beat(8)-11.15%
Revenue beat(12)6
Avg Revenue beat(12)-3.56%
Revenue beat(16)8
Avg Revenue beat(16)-3.06%
PT rev (1m)1.18%
PT rev (3m)-1.91%
EPS NQ rev (1m)16.27%
EPS NQ rev (3m)16.02%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.42%
Revenue NQ rev (1m)7.28%
Revenue NQ rev (3m)7.28%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.27 | ||
| Fwd PE | 18.14 | ||
| P/S | 5.15 | ||
| P/FCF | N/A | ||
| P/OCF | 13.94 | ||
| P/B | 1.73 | ||
| P/tB | 2.79 | ||
| EV/EBITDA | 15.91 |
EPS(TTM)2.56
EY6.55%
EPS(NY)2.16
Fwd EY5.51%
FCF(TTM)-2.04
FCFYN/A
OCF(TTM)2.81
OCFY7.17%
SpS7.6
BVpS22.57
TBVpS14.04
PEG (NY)N/A
PEG (5Y)1.3
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 | 0.9 |
F-Score5
WACC7.33%
ROIC/WACC0.47
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)38.01%
EPS 3Y15.3%
EPS 5Y11.73%
EPS Q2Q%35.35%
EPS Next Y-15.82%
EPS Next 2Y-5.84%
EPS Next 3Y-1.58%
EPS Next 5Y1.28%
Revenue 1Y (TTM)1.57%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%26.07%
Revenue Next Year9.3%
Revenue Next 2Y7.47%
Revenue Next 3Y9.05%
Revenue Next 5Y7.85%
EBIT growth 1Y9.47%
EBIT growth 3Y7.93%
EBIT growth 5Y17.37%
EBIT Next Year60.86%
EBIT Next 3Y25.81%
EBIT Next 5Y18.16%
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%