Breaking Down Artesian Resources Corporation (ARTNA) Financial Health: Key Insights for Investors

You're looking at Artesian Resources Corporation (ARTNA) because, frankly, in this volatile market, a stable utility with a strong dividend history is a rare sight. But stability doesn't mean stagnation, and the latest numbers from the first nine months of the 2025 fiscal year show a company actively investing in its future, which is where the real opportunity is. Artesian's year-to-date operating revenues hit $84.9 million, a solid 4.7% jump, but the real story is the bottom line: net income surged 12.9% to $18.7 million through September 30, 2025, translating to a diluted earnings per share (EPS) of $1.81. That's defintely a clean beat, driven by customer growth and strategic rate adjustments. But here's the quick math on their commitment to long-term value: they've poured $40.5 million into infrastructure projects-like new wastewater plants and PFAS treatment-showing a clear, capital-intensive roadmap. So, the question isn't just about the stable 3.79% annual dividend yield; it's about whether their massive infrastructure spend will keep driving that 12.4% EPS growth, even as regulatory risks persist. We need to break down how this investment cycle impacts their valuation and your next move.

Revenue Analysis

You're looking for a clear picture of how Artesian Resources Corporation (ARTNA) makes its money, and the nine-month results for 2025 tell a straightforward, utility-driven story. The company's revenue streams are highly concentrated and stable, which is exactly what you want to see in a regulated utility.

For the nine months ended September 30, 2025, Artesian Resources Corporation reported total revenues of $84.9 million. That's a solid increase of $3.8 million, representing a year-over-year growth rate of 4.7% compared to the same period in 2024. This growth is primarily driven by rate adjustments and a steady expansion of the customer base across the Delmarva Peninsula (Delaware, Maryland, and Pennsylvania).

The core business is the regulated utility segment, which provides a massive chunk of the top line. It's a low-volatility, high-certainty revenue model.

Here's the quick math on where the money comes from:

• Regulated Utility Segment (Water/Wastewater) contributes 93.5% of total operating revenues.
• The remaining revenue comes from non-utility services, mainly their Service Line Protection Plan (SLP Plan).

The company's revenue growth is less about volume spikes and more about regulatory action and customer additions. You can see this clearly in the breakdown of the revenue drivers for the year-to-date 2025 period:

The most significant change in the revenue stream is the impact of rate increases. Water sales revenue got a boost from a temporary rate increase put into effect on June 3, 2025, in Delaware, which is a common and necessary process for utilities to cover infrastructure investment and rising operational costs. This shows the company is defintely managing the regulatory environment to ensure stable earnings. The non-utility segment, while small, also saw a strong percentage increase due to a rate adjustment for the Service Line Protection Plan, which is a reliable, non-weather-dependent revenue stream. For a deeper dive into the company's strategic position, you should check out the full analysis at Breaking Down Artesian Resources Corporation (ARTNA) Financial Health: Key Insights for Investors.

Profitability Metrics

The core takeaway for Artesian Resources Corporation (ARTNA) is its exceptional net profitability, which is currently outpacing the industry average, even as its gross margin faces slight pressure. For the trailing twelve months (TTM) ending mid-2025, the company posted a Net Profit Margin of 20.16%, a clear sign of effective expense control below the gross profit line.

You're looking for a utility with predictable earnings, and ARTNA's recent performance shows it. The Net Profit Margin of 20.2% reported in November 2025 is up from the 19% margin seen last year, demonstrating a solid upward trend in translating revenue into bottom-line profit.

Margin Analysis: ARTNA vs. Industry Benchmarks

When you compare ARTNA's profitability to the US Water Supply industry (SIC 4941), a clear picture of its operational strengths and weaknesses emerges. The company's Gross Profit Margin is noticeably lower than the industry median, but its Operating and Net Profit Margins are highly competitive, which tells us a lot about cost management.

Here's the quick math on the TTM 2025 figures against the most recent industry averages:

The gap between the Gross Profit Margin (46.36%) and the Operating Profit Margin (26.96%) is where the real story is. The company's cost of water production and distribution (Cost of Goods Sold) is higher than the industry average, but management makes up for it by controlling selling, general, and administrative (SG&A) expenses. That's a defintely a sign of disciplined cost management.

Operational Efficiency and Profitability Trends

Artesian Resources Corporation's operational efficiency is best seen in its ability to grow net income faster than revenue, primarily through cost control and strategic rate increases. For the nine months ended September 30, 2025, the company reported total operating revenues of $84.926 million and operating income of $22.019 million. This translates to a year-to-date Operating Profit Margin of about 25.93%, which is very close to the TTM figure.

A key driver for revenue growth this year was the temporary rate increase put into effect in Delaware on June 3, 2025, which helped boost water sales revenue. Plus, the company's non-utility operating revenue, like the Service Line Protection Plan, also saw a jump due to a rate increase in late 2024, providing a steady, weather-independent revenue stream.

However, operating expenses are still rising, driven by payroll, supply/treatment, and transmission/distribution costs. The fact that the Net Profit Margin is improving despite these cost pressures highlights management's focus on non-operating factors, such as reduced interest charges, which played a role in improving the interest coverage ratio to 3.7 in the first half of 2025.

• Net Income for the nine months ended September 30, 2025, was $18.7 million, up 12.9% from the same period in 2024.
• Diluted net income per share for the same period increased 12.4% to $1.81.
• This profit growth significantly outpaces the company's five-year annualized earnings growth of 5.3%.

This stability and margin expansion make the stock appealing, even with forecasts of slower annual revenue growth at 3.9% compared to the broader US market rate. If you want to dig deeper into who is buying and why, you can check out Exploring Artesian Resources Corporation (ARTNA) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Artesian Resources Corporation (ARTNA) and wondering how a utility company-which needs massive, ongoing infrastructure investment-manages its capital structure. The direct takeaway is that Artesian Resources Corporation maintains a conservative, low-leverage profile compared to its peers, relying on a balanced mix of debt and equity to fund its significant capital expenditure (CapEx) program.

As of the second quarter of 2025, the company's total debt stood at approximately $179.8 million, which is a manageable amount for a regulated utility with stable cash flows. This total is split between short-term and long-term obligations, with the bulk being long-term debt, which is typical for a capital-intensive business. Here's the quick math on their leverage:

• Short-Term Debt & Capital Lease Obligation (Q2 2025): $4.3 Million
• Long-Term Debt & Capital Lease Obligation (Q2 2025): $175.5 Million
• Total Stockholders' Equity (Q3 2025): $248.843 Million

The company's reliance on debt is notably lower than the industry average, suggesting a stronger buffer against economic downturns or interest rate spikes. The debt-to-equity ratio (D/E) is the clearest measure of this balance.

The D/E ratio measures the proportion of a company's assets financed by debt versus shareholder equity (the book value of the company owned by its shareholders). Artesian Resources Corporation's Debt-to-Equity Ratio as of June 2025 was 0.73. To be fair, a ratio of 1.0 or less is often considered healthy, but for a capital-intensive, regulated utility, a higher ratio is common because their stable, government-approved revenue streams can reliably service more debt.

What this estimate hides is the industry context. The average D/E ratio for the 'Utilities - Regulated Water' sector as of November 2025 is significantly higher at approximately 1.08. Artesian Resources Corporation's ratio is 32% lower than the industry average, which is why analysts consider their balance sheet more conservative, with a debt-to-capital ratio near 40%.

In terms of recent financing, Artesian Resources Corporation has focused on maintaining liquidity and using equity for compensation. As of September 2025, the company had $38 million remaining on a $40 million demand line of credit with Citizens Bank, plus a separate $20 million line with CoBank. This gives them immediate, flexible access to capital at a competitive rate, roughly 5.6% on the Citizens Bank line. They aren't defintely scrambling for cash.

On the equity side, the company approved the 2025 Equity Compensation Plan in October 2025, which allows for the issuance of 263,932 shares of Class A non-voting common stock. This move balances debt financing for infrastructure with equity-based compensation to retain talent, avoiding the dilution of common shareholders' value through a large public offering while still using stock as a funding tool. This conservative approach to leverage gives them flexibility to fund their infrastructure investments, which totaled $40.5 million year-to-date through September 30, 2025.

To deepen your understanding of the drivers behind these numbers, you can check out the full analysis at Breaking Down Artesian Resources Corporation (ARTNA) Financial Health: Key Insights for Investors. Finance: Monitor the interest rate on the Citizens Bank line of credit against the Federal Reserve's rate outlook to project 2026 interest expense.

Liquidity and Solvency

You're looking at Artesian Resources Corporation (ARTNA), a regulated utility, and the first thing you need to know is that their liquidity ratios look tight, but that's not necessarily a red flag in this sector. For a water and wastewater utility, the game is about stable, predictable cash flow, not a huge cash hoard on the balance sheet. Still, the numbers are what they are, so let's break down the near-term picture as of late 2025.

The company's ability to cover its short-term debts with short-term assets is low. The Trailing Twelve Months (TTM) Current Ratio is approximately 0.68, and the Quick Ratio (or acid-test ratio, which excludes inventory) is also around 0.68. This means Artesian Resources Corporation has only about 68 cents in current assets for every dollar of current liabilities. For most industries, a ratio below 1.0 is a serious liquidity concern, but utilities often operate this way, relying on their predictable, regulated revenue to service debt.

Here's the quick math on their working capital (current assets minus current liabilities): it's deeply negative. The TTM Net Current Asset Value sits at approximately $-565.49 million. This negative working capital trend is a structural feature of a capital-intensive utility that constantly invests in long-term infrastructure, like water mains and treatment plants, and finances those investments with a mix of long-term debt and short-term obligations that roll over.

• Current Ratio (TTM): 0.68 (Low, but typical for a regulated utility).
• Quick Ratio (TTM): 0.68 (Excludes inventory, showing little difference from the Current Ratio).
• Net Current Asset Value (TTM): $-565.49M (Significantly negative, reflecting long-term asset focus).

The real strength of Artesian Resources Corporation lies in its cash flow from operations, which is the engine that keeps the lights on and the water flowing. For the TTM period ending in Q3 2025, the Operating Cash Flow was a healthy $36.82 million. This stable cash generation is what makes the low liquidity ratios acceptable to creditors.

However, the company is in a heavy capital expenditure cycle. The TTM Investing Cash Flow shows a significant outflow of $-45.32 million, which is mostly money invested in water and wastewater infrastructure. This includes the $40.5 million invested year-to-date through September 30, 2025, for projects like new mains and a wastewater treatment plant. This required investment is why the Free Cash Flow (OCF minus Capital Expenditures) is negative, coming in at $-9.12 million TTM.

To fund this investment and cover the negative free cash flow, the company relies on external funding, which shows up in the TTM Financing Cash Flow of $7.14 million. This is where the long-term debt and equity issuance come into play. The key takeaway is that while the short-term liquidity ratios are defintely low, the regulated nature of the business and its stable operating cash flow mitigate the immediate risk. The company is financially sound, boasting an improved interest coverage ratio of 3.7 in the first half of 2025, up from 3.2 in H1 2024. For a deeper dive into the valuation and strategy, you can read more in our full post: Breaking Down Artesian Resources Corporation (ARTNA) Financial Health: Key Insights for Investors.

The table below summarizes the TTM cash flow trends, which are the most critical element of a utility's financial health:

Valuation Analysis

You're looking at Artesian Resources Corporation (ARTNA), a regulated utility, and wondering if the price you see is the right price. For a stable, infrastructure-heavy business like this, valuation is less about explosive growth and more about predictable cash flow and asset coverage. The quick takeaway is that, based on trailing twelve months (TTM) data as of November 2025, Artesian Resources Corporation appears to be undervalued compared to its industry peers, but the market is pricing in its slower growth profile.

Here's the quick math on the core valuation metrics, which tell a compelling story of a discounted utility stock.

The TTM Price-to-Earnings (P/E) ratio sits at 14.75, which is significantly lower than the water utility peer average, often seen in the high 20s or even 30s. For a company expected to post a fiscal year 2025 earnings per share (EPS) of around $2.18, this multiple suggests a discount. Plus, the Price-to-Book (P/B) ratio is only 1.33. Honestly, for a regulated utility with a large, stable asset base, a P/B this low suggests the market is not fully valuing the company's infrastructure, which is defintely a good sign for value investors.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which is crucial for capital-intensive companies, is also attractive. As of November 2025, the TTM EV/EBITDA is around 6.43. This is a very favorable number in the utilities sector, indicating the company's operating cash flow is strong relative to its total value (market capitalization plus net debt). A low EV/EBITDA often signals an undervalued stock, especially when compared to the sector average.

• TTM P/E Ratio: 14.75 (Suggests undervaluation versus utility peers).
• Price-to-Book (P/B) Ratio: 1.33 (Indicates assets are not fully priced).
• TTM EV/EBITDA Ratio: 6.43 (Strong operating cash flow relative to enterprise value).

Stock Price Trend and Analyst View

Looking at the stock price trend over the last 12 months, Artesian Resources Corporation has traded in a relatively tight range, which is typical for a utility. The 52-week low was $29.45, and the 52-week high reached $36.67. The stock is currently trading around $32.40, positioning it closer to the low end of its annual range. This stability, but lack of upward momentum, is likely tied to the company's projected annual revenue growth of 3.9%, which is slower than the broader US market.

Analyst consensus is limited but mixed. While some ratings agencies have reiterated a 'Hold' rating, a more bullish view exists with a median price target of $46.00. This target implies a significant upside of over 40% from the current price, suggesting that some analysts see a clear path for a re-rating of the stock's multiple as its margin improvements continue. The market is waiting for stronger growth signals before awarding a higher multiple.

Dividend Health and Payout

For a utility, the dividend is a key part of the total return. Artesian Resources Corporation has a strong history of dividend stability and growth. The annual dividend is currently $1.23 per share, which translates to a TTM dividend yield of about 3.78%. This yield is competitive and a definite draw for income-focused portfolios.

The dividend payout ratio is healthy and sustainable, sitting around 56.41% of earnings. This means the company is retaining almost half of its earnings to reinvest in its infrastructure-like the $40.5 million invested year-to-date in 2025 for water and wastewater infrastructure-while still providing a solid return to shareholders. A payout ratio well below 70% for a utility is a sign of financial discipline and dividend safety.

To dig deeper into the drivers behind these numbers, you should read the full analysis: Breaking Down Artesian Resources Corporation (ARTNA) Financial Health: Key Insights for Investors

Risk Factors

You're looking at Artesian Resources Corporation (ARTNA), a stable utility, but even regulated water providers face real headwinds that can erode value. The key takeaway for investors right now is that while the company's margins are solid-net profit margin hit 20.2% as of November 2025, up from 19% last year-its growth is lagging the broader market, and regulatory uncertainty is a constant threat to profitability.

Here's the quick math: Artesian's projected annual revenue growth of 3.9% is far slower than the 10.4% annual rate for the broader US market. That slower growth limits your upside, so you need to pay close attention to cost control and rate case outcomes to ensure stable returns.

Regulatory and Rate Uncertainty

The biggest external risk for a utility like Artesian Resources Corporation (ARTNA) is the regulatory environment, specifically the Delaware Public Service Commission (DEPSC). Your revenue growth is tied directly to what rates the DEPSC approves. Artesian Water Company, the principal subsidiary, filed a request in April 2025 for a permanent incremental revenue increase of approximately $9.4 million, or 10.75% on an annualized basis.

The company put a temporary rate increase into effect on June 3, 2025, but the final, permanent rates are still pending determination. This lag creates financial risk because the company is incurring higher operating expenses now, but the full recovery of those costs is not guaranteed until the DEPSC rules. This is a classic utility risk: capital goes out now, but the return on investment (ROI) is decided later by a third party. You need the full rate hike to stick.

• Regulatory lag delays revenue recovery.
• DEPSC decision on $9.4 million rate request is crucial.

Cost Inflation and Operational Pressure

Inflation is hitting Artesian's bottom line, which is a major operational risk. Utility operating expenses increased by $2.0 million, or 5.5%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The most concrete example is energy costs: the company signed a new electric supply contract in April 2025 that included a cost increase of approximately 25% over the previous electric supply rate, effective through May 2029. Plus, you're seeing a year-to-date increase of $0.5 million in payroll and employee benefit costs and a $0.7 million increase in administrative costs through Q3 2025. Artesian is also managing increasing cost pressures associated with meeting more stringent water quality standards, which requires continuous investment.

Mitigation Strategies and Strategic Investment

To be fair, Artesian Resources Corporation (ARTNA) isn't just sitting back; they are actively mitigating these risks. The core strategy is continuous infrastructure investment, which is the long-term solution to operational risk and a legal requirement for a utility. The company invested $40.5 million year-to-date in 2025 in water and wastewater infrastructure. This spending is essential for maintaining service, meeting new quality standards, and expanding the customer base, which ultimately justifies future rate increases to the DEPSC. This focus on operational excellence, regulatory compliance, and strong financial management is their stated plan to support long-term strength and stability. For a deeper dive into the company's long-term vision, you can review their Mission Statement, Vision, & Core Values of Artesian Resources Corporation (ARTNA).

Growth Opportunities

You're looking at Artesian Resources Corporation (ARTNA) because utilities offer stability, but you want to know where the growth is coming from. The core takeaway is that Artesian is leveraging regulated rate increases and significant infrastructure investment-capital expenditure (CapEx)-to drive predictable, near-term earnings growth, even with slower overall revenue expansion.

The company is a classic utility play: stable, dividend-focused, and with a geographically-concentrated market on the Delmarva Peninsula. Artesian's growth isn't about flashy product innovations; it's about essential infrastructure and regulatory wins. They are defintely a trend-aware realist in the utility space.

• Invest in CapEx to earn higher rates.
• Win regulatory approval for new rates.
• Expand wastewater capacity for new developments.

Key Growth Drivers: CapEx and Regulatory Rate Cases

The biggest driver for Artesian Resources Corporation (ARTNA) is its ongoing capital investment program, which is then recovered through regulated rate increases. Through the first nine months of 2025, the company invested a substantial $40.5 million in water and wastewater infrastructure. This is how a utility grows its rate base (the value of property on which it is permitted to earn a return). For example, a significant strategic initiative is the pending rate case with the Delaware Public Service Commission (PSC). If fully approved, this could provide a net incremental increase to annual revenue of 10.75%, or approximately $9.4 million a year. Here's the quick math: that regulatory tailwind is a powerful, non-cyclical boost to the top line.

Plus, they are expanding their non-utility offerings, which helps diversify revenue. Non-utility operating revenue, largely from their Service Line Protection Plan (SLP Plan), increased about 10.8% in Q3 2025 due to rate increases put in place last December. You can see their long-term commitment to the region in their Mission Statement, Vision, & Core Values of Artesian Resources Corporation (ARTNA).

Future Revenue and Earnings Outlook (2025 Fiscal Year)

The financial picture for 2025 is one of stable, single-digit growth, which is solid for a regulated utility. Artesian Resources Corporation (ARTNA) is expected to grow its earnings per share (EPS) from a trailing $1.92 to $2.00 per share next year, representing a 4.17% increase. Some analysts are even more optimistic, projecting a diluted EPS of $2.16 for the full 2025 fiscal year, a 9.1% jump. What this estimate hides is the fact that utility growth is slower than the broader US market, with projected annual revenue growth at 3.9% compared to the US market's average of 10.4%. Still, their net profit margin is strong at 20.2% as of November 2025, up from 19% last year, showing excellent cost management.

The company's Q3 2025 results already showed this trajectory, reporting revenue of $30.49 million and diluted EPS of $0.68, both beating analyst consensus estimates. The stability of the business model makes these numbers highly reliable.

Competitive Advantages and Actionable Insights

Artesian Resources Corporation (ARTNA) holds a significant competitive advantage as a regulated monopoly in its service area. This status provides recession-resistant cash flows and a high degree of earnings predictability. They are a Dividend Champion, having increased their dividend for 30 consecutive years, which tells you everything about their financial discipline and stability. Their balance sheet is solid, with annual interest expense well-covered by operating income. Honestly, the valuation is attractive, too. The company's Price-to-Earnings (P/E) ratio of 14.7x is well below the global water utilities industry average of 16.7x, signaling it may be undervalued given its quality earnings and margin strength.

A clear action for you is to monitor the outcome of the pending rate case and the completion of the new 625,000 gallon per day regional wastewater treatment facility, which is expected to be finished in 2025. These events will directly translate into higher revenue and rate base growth.