ESSENTIAL UTILITIES INC (WTRG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WTRG - US29670G1022 - Common Stock
39.19 USD
-0.41 (-1.04%)
39.21 USD
+0.02 (+0.05%)
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. WTRG has a decent growth rate and is not valued too expensively. Finally WTRG also has an excellent dividend rating.
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.
- In the past 5 years WTRG always reported a positive cash flow from operatings.
1.2 Ratios
- WTRG has a Return On Assets of 3.54%. This is in the better half of the industry: WTRG outperforms 71.43% of its industry peers.
- WTRG has a Return On Equity of 9.81%. This is in the better half of the industry: WTRG outperforms 78.57% of its industry peers.
- WTRG has a better Return On Invested Capital (3.98%) than 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 4.99%.
- The 3 year average ROIC (3.45%) for WTRG is below the current ROIC(3.98%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.54% | ||
| ROE | 9.81% | ||
| ROIC | 3.98% |
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 28.09%, 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.
- WTRG has a better Operating Margin (38.68%) than 92.86% of its industry peers.
- WTRG's Operating Margin has been stable in the last couple of years.
- WTRG's Gross Margin of 84.94% is amongst the best of the industry. WTRG outperforms 92.86% of its industry peers.
- In the last couple of years the Gross Margin of WTRG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.68% | ||
| PM (TTM) | 28.09% | ||
| GM | 84.94% |
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.
- 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
- Based on the Altman-Z score of 0.99, we must say that WTRG is in the distress zone and has some risk of bankruptcy.
- WTRG has a Altman-Z score (0.99) which is comparable to the rest of the industry.
- WTRG has a Debt/Equity ratio of 1.14. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.14, WTRG perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.14 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.99 |
ROIC/WACC0.5
WACC7.91%
2.3 Liquidity
- A Current Ratio of 0.60 indicates that WTRG may have some problems paying its short term obligations.
- WTRG has a Current ratio of 0.60. This is in the lower half of the industry: WTRG underperforms 71.43% of its industry peers.
- A Quick Ratio of 0.43 indicates that WTRG may have some problems paying its short term obligations.
- The Quick ratio of WTRG (0.43) is worse than 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
- WTRG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.80%, which is quite impressive.
- WTRG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.10% yearly.
- Looking at the last year, WTRG shows a very strong growth in Revenue. The Revenue has grown by 21.35%.
- 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)20.8%
EPS 3Y9.12%
EPS 5Y8.1%
EPS Q2Q%32%
Revenue 1Y (TTM)21.35%
Revenue growth 3Y3.56%
Revenue growth 5Y18.58%
Sales Q2Q%9.58%
3.2 Future
- WTRG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.33% yearly.
- WTRG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.32% yearly.
EPS Next Y-0.41%
EPS Next 2Y2.59%
EPS Next 3Y4.27%
EPS Next 5Y4.33%
Revenue Next Year7.89%
Revenue Next 2Y6.64%
Revenue Next 3Y6.83%
Revenue Next 5Y6.32%
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 16.26, the valuation of WTRG can be described as correct.
- 85.71% of the companies in the same industry are more expensive than WTRG, based on the Price/Earnings ratio.
- WTRG is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 17.16 indicates a rather expensive valuation of WTRG.
- WTRG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. WTRG is cheaper than 78.57% of the companies in the same industry.
- WTRG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.26 | ||
| Fwd PE | 17.16 |
4.2 Price Multiples
- WTRG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WTRG is cheaper than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.25 |
4.3 Compensation for Growth
- WTRG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.01
EPS Next 2Y2.59%
EPS Next 3Y4.27%
5. Dividend
5.1 Amount
- WTRG has a Yearly Dividend Yield of 3.58%. 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 2.93. WTRG pays more dividend than 85.71% of the companies in the same industry.
- WTRG's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
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 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
- 54.79% 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.
DP54.79%
EPS Next 2Y2.59%
EPS Next 3Y4.27%
ESSENTIAL UTILITIES INC / WTRG FAQ
Can you provide the ChartMill fundamental rating for ESSENTIAL UTILITIES INC?
ChartMill assigns a fundamental rating of 4 / 10 to WTRG.
Can you provide the valuation status for ESSENTIAL UTILITIES INC?
ChartMill assigns a valuation rating of 4 / 10 to ESSENTIAL UTILITIES INC (WTRG). This can be considered as Fairly Valued.
Can you provide the profitability details for ESSENTIAL UTILITIES INC?
ESSENTIAL UTILITIES INC (WTRG) has a profitability rating of 8 / 10.
Can you provide the financial health for WTRG stock?
The financial health rating of ESSENTIAL UTILITIES INC (WTRG) is 0 / 10.
How sustainable is the dividend of ESSENTIAL UTILITIES INC (WTRG) stock?
The dividend rating of ESSENTIAL UTILITIES INC (WTRG) is 7 / 10 and the dividend payout ratio is 54.79%.