Essential Utilities, Inc. (WTRG) Bundle
Understanding Essential Utilities, Inc. (WTRG) Revenue Streams
Revenue Analysis
Essential Utilities, Inc. reported $1.56 billion in total revenue for the fiscal year 2023.
Revenue Source | Amount ($ millions) | Percentage |
---|---|---|
Water Services | 1,024 | 65.6% |
Wastewater Services | 436 | 28% |
Other Utility Services | 100 | 6.4% |
Revenue growth details for the past three years:
- 2021: $1.42 billion
- 2022: $1.49 billion (4.9% year-over-year increase)
- 2023: $1.56 billion (4.7% year-over-year increase)
Geographic revenue distribution:
Region | Revenue Contribution |
---|---|
Pennsylvania | 62% |
Illinois | 18% |
Other States | 20% |
A Deep Dive into Essential Utilities, Inc. (WTRG) Profitability
Profitability Metrics Analysis
Essential Utilities, Inc. demonstrated financial performance with the following profitability metrics for the fiscal year 2023:
Profitability Metric | Value |
---|---|
Gross Profit Margin | 35.2% |
Operating Profit Margin | 24.7% |
Net Profit Margin | 18.3% |
Return on Equity (ROE) | 8.9% |
Return on Assets (ROA) | 4.6% |
Key profitability insights include:
- Gross profit for 2023: $1.42 billion
- Operating income: $998 million
- Net income: $741 million
Comparative industry profitability metrics reveal:
Metric | Company | Industry Average |
---|---|---|
Gross Profit Margin | 35.2% | 33.6% |
Operating Profit Margin | 24.7% | 22.9% |
Operational efficiency indicators:
- Operating expense ratio: 10.5%
- Cost of revenue: $921 million
- Revenue per employee: $532,000
Debt vs. Equity: How Essential Utilities, Inc. (WTRG) Finances Its Growth
Debt vs. Equity Structure Analysis
Essential Utilities, Inc. (WTRG) maintains a financial structure characterized by the following debt and equity metrics:
Debt Metric | Amount ($ Millions) |
---|---|
Total Long-Term Debt | $3,985.4 |
Short-Term Debt | $287.6 |
Total Shareholders' Equity | $4,612.5 |
Debt-to-Equity Ratio | 0.94 |
Key financing characteristics include:
- Credit Rating: BBB+ (Standard & Poor's)
- Total Debt: $4,273 million
- Weighted Average Interest Rate: 4.35%
Recent debt financing activities:
- Senior Notes Issuance: $500 million at 4.25% interest
- Maturity Profile: Predominantly long-term debt instruments
- Debt Refinancing: Reduced average interest costs by 0.25%
Equity Funding Source | Percentage |
---|---|
Common Stock Issuance | 62% |
Retained Earnings | 38% |
Assessing Essential Utilities, Inc. (WTRG) Liquidity
Liquidity and Solvency Analysis
Essential Utilities, Inc. demonstrates key liquidity metrics as of the most recent financial reporting period:
Liquidity Metric | Value |
---|---|
Current Ratio | 1.02 |
Quick Ratio | 0.88 |
Working Capital | $42.3 million |
Cash flow statement highlights include:
- Operating Cash Flow: $520.4 million
- Investing Cash Flow: -$687.2 million
- Financing Cash Flow: $167.9 million
Key liquidity indicators reveal:
- Total Cash and Cash Equivalents: $126.5 million
- Short-Term Debt: $215.6 million
- Long-Term Debt: $4.2 billion
Debt Metric | Percentage |
---|---|
Debt-to-Equity Ratio | 1.45 |
Interest Coverage Ratio | 3.2 |
Is Essential Utilities, Inc. (WTRG) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
An in-depth examination of the company's financial valuation metrics reveals critical insights for potential investors.
Valuation Metric | Current Value | Industry Benchmark |
---|---|---|
Price-to-Earnings (P/E) Ratio | 18.6x | 19.2x |
Price-to-Book (P/B) Ratio | 1.85x | 2.1x |
Enterprise Value/EBITDA | 12.4x | 13.7x |
Stock Price Performance
Stock price performance over the past 12 months:
- 52-week low: $36.45
- 52-week high: $47.82
- Current price: $42.15
- Price change in last 12 months: +15.6%
Dividend Analysis
Dividend Metric | Current Value |
---|---|
Dividend Yield | 3.2% |
Payout Ratio | 65.4% |
Annual Dividend per Share | $1.35 |
Analyst Recommendations
Recommendation | Number of Analysts | Percentage |
---|---|---|
Buy | 8 | 53.3% |
Hold | 5 | 33.3% |
Sell | 2 | 13.4% |
Target price range: $44.20 - $49.75
Key Risks Facing Essential Utilities, Inc. (WTRG)
Risk Factors
Essential Utilities, Inc. faces several critical risk factors that investors must carefully evaluate:
Operational Risks
- Infrastructure aging with $1.4 billion allocated for infrastructure replacement in 2024
- Potential water main breaks and service interruptions
- Cybersecurity vulnerabilities in utility management systems
Financial Risks
Risk Category | Potential Impact | Mitigation Strategy |
---|---|---|
Interest Rate Fluctuations | $620 million potential exposure | Fixed-rate debt hedging |
Regulatory Compliance | $45 million potential compliance costs | Proactive regulatory engagement |
Climate Change Adaptation | $280 million infrastructure resilience investment | Climate risk management program |
Market and Competitive Risks
- Water scarcity in 7 service territories
- Increasing competition from municipal water providers
- Potential rate regulation changes
Environmental Risks
Key environmental challenges include:
- Potential contamination risks: $22 million annual environmental monitoring costs
- Watershed protection investments: $95 million allocated in 2024
- Emerging water quality regulatory standards
Regulatory Compliance Risks
Regulation | Potential Financial Impact | Compliance Status |
---|---|---|
EPA Water Quality Standards | $38 million potential upgrade costs | Partial Compliance |
Infrastructure Investment | $670 million planned investments | Ongoing Implementation |
Future Growth Prospects for Essential Utilities, Inc. (WTRG)
Growth Opportunities
Essential Utilities, Inc. demonstrates significant growth potential through strategic market positioning and expansion initiatives.
Market Expansion Strategy
Growth Metric | 2024 Projection |
---|---|
Regulated Water Service Territories | 10 states |
Projected Capital Investment | $1.7 billion annually |
Infrastructure Modernization Budget | $650 million through 2026 |
Strategic Growth Drivers
- Water infrastructure replacement programs
- Acquisitions in regulated utility markets
- Renewable energy infrastructure development
Revenue Growth Projections
Year | Projected Revenue | Growth Rate |
---|---|---|
2024 | $1.85 billion | 5.2% |
2025 | $1.95 billion | 5.5% |
Competitive Advantages
- Regulatory compliance expertise
- Advanced water treatment technologies
- Sustainable infrastructure investments
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