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ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis

NYSE:WTRG - New York Stock Exchange, Inc. - US29670G1022 - Common Stock - Currency: USD

35.16  -0.55 (-1.54%)

After market: 35.16 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to WTRG. WTRG was compared to 14 industry peers in the Water Utilities industry. While WTRG is still in line with the averages on profitability rating, there are concerns on its financial health. WTRG has a decent growth rate and is not valued too expensively. Finally WTRG also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

In the past year WTRG was profitable.
WTRG had a positive operating cash flow in the past year.
In the past 5 years WTRG has always been profitable.
WTRG had a positive operating cash flow in each of the past 5 years.
WTRG Yearly Net Income VS EBIT VS OCF VS FCFWTRG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M -400M 600M 800M

1.2 Ratios

WTRG has a Return On Assets (3.11%) which is in line with its industry peers.
WTRG's Return On Equity of 8.83% is on the low side compared to the rest of the industry. WTRG is outperformed by 64.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.27%, WTRG is doing worse than 64.29% of the companies in the same industry.
WTRG had an Average Return On Invested Capital over the past 3 years of 3.42%. This is below the industry average of 5.70%.
Industry RankSector Rank
ROA 3.11%
ROE 8.83%
ROIC 3.27%
ROA(3y)2.95%
ROA(5y)2.67%
ROE(3y)8.48%
ROE(5y)7.46%
ROIC(3y)3.42%
ROIC(5y)3.22%
WTRG Yearly ROA, ROE, ROICWTRG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

WTRG has a Profit Margin of 27.84%. This is amongst the best in the industry. WTRG outperforms 85.71% of its industry peers.
WTRG's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 35.95%, WTRG is doing good in the industry, outperforming 78.57% of the companies in the same industry.
WTRG's Operating Margin has declined in the last couple of years.
WTRG has a Gross Margin of 88.78%. This is amongst the best in the industry. WTRG outperforms 100.00% of its industry peers.
In the last couple of years the Gross Margin of WTRG has declined.
Industry RankSector Rank
OM 35.95%
PM (TTM) 27.84%
GM 88.78%
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
WTRG Yearly Profit, Operating, Gross MarginsWTRG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60 80

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1

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WTRG is destroying value.
WTRG has more shares outstanding than it did 1 year ago.
WTRG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, WTRG has an improved debt to assets ratio.
WTRG Yearly Shares OutstandingWTRG Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
WTRG Yearly Total Debt VS Total AssetsWTRG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

2.2 Solvency

WTRG has an Altman-Z score of 0.89. This is a bad value and indicates that WTRG is not financially healthy and even has some risk of bankruptcy.
WTRG has a Altman-Z score (0.89) which is comparable to the rest of the industry.
WTRG has a Debt/Equity ratio of 1.19. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.19, WTRG is in line with its industry, outperforming 42.86% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.19
Debt/FCF N/A
Altman-Z 0.89
ROIC/WACC0.45
WACC7.21%
WTRG Yearly LT Debt VS Equity VS FCFWTRG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B

2.3 Liquidity

A Current Ratio of 0.55 indicates that WTRG may have some problems paying its short term obligations.
WTRG has a worse Current ratio (0.55) than 92.86% of its industry peers.
A Quick Ratio of 0.39 indicates that WTRG may have some problems paying its short term obligations.
The Quick ratio of WTRG (0.39) is worse than 92.86% of its industry peers.
Industry RankSector Rank
Current Ratio 0.55
Quick Ratio 0.39
WTRG Yearly Current Assets VS Current LiabilitesWTRG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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4

3. Growth

3.1 Past

WTRG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.83%, which is quite good.
WTRG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.64% yearly.
WTRG shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -13.98%.
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)10.83%
EPS 3Y5.49%
EPS 5Y5.64%
EPS Q2Q%-16.67%
Revenue 1Y (TTM)-13.98%
Revenue growth 3Y11.98%
Revenue growth 5Y19.63%
Sales Q2Q%5.84%

3.2 Future

WTRG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.02% yearly.
The Revenue is expected to grow by 4.68% on average over the next years.
EPS Next Y12.14%
EPS Next 2Y7.87%
EPS Next 3Y7.03%
EPS Next 5Y7.02%
Revenue Next Year-5.87%
Revenue Next 2Y1.08%
Revenue Next 3Y2.57%
Revenue Next 5Y4.68%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better 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.
WTRG Yearly Revenue VS EstimatesWTRG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 1B 2B 3B
WTRG Yearly EPS VS EstimatesWTRG Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0.5 1 1.5 2 2.5

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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 17.58, the valuation of WTRG can be described as rather expensive.
WTRG's Price/Earnings ratio is a bit cheaper when compared to the industry. WTRG is 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 (28.28), we can say WTRG is valued slightly cheaper.
WTRG is valuated correctly with a Price/Forward Earnings ratio of 16.29.
Based on the Price/Forward Earnings ratio, WTRG is valued 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 (91.29), we can say WTRG is valued rather cheaply.
Industry RankSector Rank
PE 17.58
Fwd PE 16.29
WTRG Price Earnings VS Forward Price EarningsWTRG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

WTRG's Enterprise Value to EBITDA is on the same level as the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 15.86
WTRG Per share dataWTRG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15 20

4.3 Compensation for Growth

WTRG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.45
PEG (5Y)3.12
EPS Next 2Y7.87%
EPS Next 3Y7.03%

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7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.88%, WTRG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.57, 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 rather good when compared to the S&P500 average which is at 2.27.
Industry RankSector Rank
Dividend Yield 3.88%

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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.86%
Div Incr Years33
Div Non Decr Years34
WTRG Yearly Dividends per shareWTRG Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

62.44% of the earnings are spent on dividend by WTRG. This is not a sustainable payout ratio.
WTRG's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP62.44%
EPS Next 2Y7.87%
EPS Next 3Y7.03%
WTRG Yearly Income VS Free CF VS DividendWTRG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M -400M
WTRG Dividend Payout.WTRG Dividend Payout, showing the Payout Ratio.WTRG Dividend Payout.PayoutRetained Earnings

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ESSENTIAL UTILITIES INC

NYSE:WTRG (1/29/2025, 8:04:00 PM)

After market: 35.16 0 (0%)

35.16

-0.55 (-1.54%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)11-04 2024-11-04/amc
Earnings (Next)02-20 2025-02-20/amc
Inst Owners83.66%
Inst Owner Change0.45%
Ins Owners0.18%
Ins Owner Change-0.08%
Market Cap9.66B
Analysts84.44
Price Target46.41 (32%)
Short Float %2.16%
Short Ratio4.09
Dividend
Industry RankSector Rank
Dividend Yield 3.88%
Yearly Dividend1.18
Dividend Growth(5Y)6.86%
DP62.44%
Div Incr Years33
Div Non Decr Years34
Ex-Date02-10 2025-02-10 (0.3255)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.01%
Min EPS beat(2)-9.5%
Max EPS beat(2)1.49%
EPS beat(4)2
Avg EPS beat(4)3.24%
Min EPS beat(4)-9.5%
Max EPS beat(4)23.5%
EPS beat(8)3
Avg EPS beat(8)1.04%
EPS beat(12)5
Avg EPS beat(12)1.82%
EPS beat(16)8
Avg EPS beat(16)2.73%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-3.81%
Max Revenue beat(2)2.35%
Revenue beat(4)1
Avg Revenue beat(4)-13.78%
Min Revenue beat(4)-33.67%
Max Revenue beat(4)2.35%
Revenue beat(8)3
Avg Revenue beat(8)-6.29%
Revenue beat(12)7
Avg Revenue beat(12)-1.56%
Revenue beat(16)8
Avg Revenue beat(16)-2.97%
PT rev (1m)0%
PT rev (3m)-1.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)26.24%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)24.44%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.14%
Valuation
Industry RankSector Rank
PE 17.58
Fwd PE 16.29
P/S 4.92
P/FCF N/A
P/OCF 12.85
P/B 1.56
P/tB 2.52
EV/EBITDA 15.86
EPS(TTM)2
EY5.69%
EPS(NY)2.16
Fwd EY6.14%
FCF(TTM)-1.84
FCFYN/A
OCF(TTM)2.74
OCFY7.78%
SpS7.14
BVpS22.51
TBVpS13.97
PEG (NY)1.45
PEG (5Y)3.12
Profitability
Industry RankSector Rank
ROA 3.11%
ROE 8.83%
ROCE 4.18%
ROIC 3.27%
ROICexc 3.27%
ROICexgc 3.8%
OM 35.95%
PM (TTM) 27.84%
GM 88.78%
FCFM N/A
ROA(3y)2.95%
ROA(5y)2.67%
ROE(3y)8.48%
ROE(5y)7.46%
ROIC(3y)3.42%
ROIC(5y)3.22%
ROICexc(3y)3.42%
ROICexc(5y)3.37%
ROICexgc(3y)4.06%
ROICexgc(5y)3.89%
ROCE(3y)4.37%
ROCE(5y)4.11%
ROICexcg growth 3Y4.22%
ROICexcg growth 5Y0.16%
ROICexc growth 3Y5.57%
ROICexc growth 5Y-2.77%
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
F-Score6
Asset Turnover0.11
Health
Industry RankSector Rank
Debt/Equity 1.19
Debt/FCF N/A
Debt/EBITDA 6.91
Cap/Depr 347.98%
Cap/Sales 64.1%
Interest Coverage 250
Cash Conversion 70.48%
Profit Quality N/A
Current Ratio 0.55
Quick Ratio 0.39
Altman-Z 0.89
F-Score6
WACC7.21%
ROIC/WACC0.45
Cap/Depr(3y)340.76%
Cap/Depr(5y)339.79%
Cap/Sales(3y)53.06%
Cap/Sales(5y)55.63%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.83%
EPS 3Y5.49%
EPS 5Y5.64%
EPS Q2Q%-16.67%
EPS Next Y12.14%
EPS Next 2Y7.87%
EPS Next 3Y7.03%
EPS Next 5Y7.02%
Revenue 1Y (TTM)-13.98%
Revenue growth 3Y11.98%
Revenue growth 5Y19.63%
Sales Q2Q%5.84%
Revenue Next Year-5.87%
Revenue Next 2Y1.08%
Revenue Next 3Y2.57%
Revenue Next 5Y4.68%
EBIT growth 1Y2.46%
EBIT growth 3Y13.11%
EBIT growth 5Y16.45%
EBIT Next Year59.61%
EBIT Next 3Y24.29%
EBIT Next 5Y18.81%
FCF growth 1Y-9.34%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y24.84%
OCF growth 3Y22.49%
OCF growth 5Y20.43%