Breaking Down The York Water Company (YORW) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in utility companies? Have you taken a good look at The York Water Company (YORW)? While 2024 presented a mixed bag, with operating revenues climbing to $74.959 million, a $3.928 million increase from 2023, net income saw a dip of $3.432 million, settling at $20.325 million, and earnings per share decreased by $0.24 to $1.42, the company still managed a 4% boost in dividends per share. With substantial investments of $48.2 million in infrastructure projects and strategic acquisitions of four water and two wastewater systems, is YORW poised for a strong future? Let's dive deeper into the financial health of this utility provider and uncover the key insights that can inform your investment decisions.

The York Water Company (YORW) Revenue Analysis

Understanding The York Water Company (YORW)'s financial health requires a close examination of its revenue streams. The company operates primarily in the public utility sector, providing water and wastewater services in Pennsylvania. A detailed look into their revenue sources, growth rates, and segment contributions offers key insights for investors.

For the fiscal year 2024, The York Water Company reported operating revenues of $74.959 million, marking an increase of $3.928 million compared to 2023. However, net income saw a decrease of $3.432 million, settling at $20.325 million. Earnings per share also declined by $0.24 to $1.42.

The primary drivers behind the revenue increase include:

• An increase in rates that took effect on March 1, 2023.
• Revenues from the Distribution System Improvement Charge (DSIC).
• Growth in the customer base.

Despite the revenue growth, increased operation and maintenance expenses, depreciation, interest on debt, and a lower allowance for funds used during construction (AFUDC) offset these gains.

Here's a breakdown of the revenue growth trends:

• 2024: $74.96 million, a growth of 5.53%
• 2023: $71.03 million, a growth of 18.26%
• 2022: $60.06 million, a growth of 8.97%
• 2021: $55.12 million, a growth of 2.35%
• 2020: $53.85 million, a growth of 4.41%

In 2024, the company invested $48.2 million in construction expenditures. These investments covered:

• Armoring and replacing the spillway of the Lake Williams dam.
• Wastewater treatment plant construction.
• Routine replacements and improvements to infrastructure.

Additionally, approximately 50,200 feet of pipe were replaced to enhance the distribution system, reduce expenses, and improve customer service. The company also invested a combined $783,000 in acquiring four water and two wastewater systems.

Here is a table summarizing the revenue streams:

In 2024, operating revenue was derived from the following sources:

• Residential: 64%
• Commercial and industrial: 29%
• Other (primarily fire service): 7%

For more insights into the investors of The York Water Company, check out: Exploring The York Water Company (YORW) Investor Profile: Who’s Buying and Why?

The York Water Company (YORW) Profitability Metrics

Analyzing the profitability of The York Water Company (YORW) provides key insights into its financial health and operational efficiency. Profitability metrics such as gross profit, operating profit, and net profit margins are essential indicators for investors.

For the fiscal year 2024, The York Water Company's financial results include:

• Operating Revenues: $74.959 million, an increase of $3.928 million compared to 2023.
• Net Income: $20.325 million, a decrease of $3.432 million compared to 2023.
• Earnings per Share: $1.42, a decrease of $0.24 compared to 2023.

Here's a breakdown of The York Water Company (YORW) profitability based on available 2024 data:

• Gross Profit: $55.289 million

While specific operating and net profit margin figures for 2024 aren't directly available in the search results, we can reference profitability ratings and historical data to infer trends.

Based on historical data and financial reports:

• Gross Margin: According to CSIMarket, the gross profit margin for Q4 2024 was 66.63%.
• Operating Margin: Historical data suggests an operating margin of 38.58%.
• Net Profit Margin: Historical data indicates a net profit margin of 28.57%.

It's important to note that these values may vary slightly depending on the source and the specific period analyzed.

The York Water Company's revenue increased by 5.53% compared to the previous year, reaching $74.96 million in 2024. However, earnings decreased by -14.45% to $20.33 million. This mixed performance reflects both positive revenue growth and challenges in maintaining profitability due to increased expenses.

For a more detailed comparison of profitability ratios with industry averages, you can refer to financial analysis resources that provide benchmarking data for the utilities sector.

The York Water Company invested $48.2 million in construction expenditures in 2024, including projects such as:

• Armoring and replacing the spillway of the Lake Williams dam
• Wastewater treatment plant construction
• Routine replacements and improvements to infrastructure

Additionally, the company invested $783,000 in the acquisition of four water and two wastewater systems.

These investments are aimed at improving the distribution system, reducing ongoing expenses, and enhancing customer service.

Here is a table summarizing key financial figures for The York Water Company in 2024:

Increased revenues were primarily due to rate increases effective March 1, 2023, revenues from the Distribution System Improvement Charge (DSIC), and growth in the customer base. The increased revenue and lower pension costs were more than offset by higher operation and maintenance expenses, depreciation, interest on debt, and a lower allowance for funds used during construction (AFUDC).

Despite a decrease in net income and earnings per share, The York Water Company increased its dividends per share by 4% in 2024, demonstrating a commitment to returning value to shareholders.

See Mission Statement, Vision, & Core Values of The York Water Company (YORW).

The York Water Company (YORW) Debt vs. Equity Structure

Understanding how The York Water Company (YORW) manages its debt and equity is crucial for investors. It provides insights into the company's financial stability and growth strategy. Let's delve into the specifics of YORW's debt levels, ratios, and financing approaches.

As of the fiscal year 2024, The York Water Company's financial structure includes a mix of debt and equity. Examining the specifics, the long-term debt is a significant component. According to the 2024 data, the company’s debt-to-equity ratio reflects its approach to balancing debt financing with equity funding. This ratio is a key indicator of the company's financial leverage and risk.

Here’s a summary of The York Water Company’s debt-related activities:

• Overview of Debt Levels: The York Water Company strategically uses debt to fund infrastructure projects and operational needs.
• Debt-to-Equity Ratio: The debt-to-equity ratio is a critical metric for assessing financial risk. A higher ratio indicates greater reliance on debt, which can amplify both profits and losses.
• Recent Debt Activities: Monitoring recent debt issuances and refinancing activities provides insights into how the company is managing its capital structure and interest expenses.
• Balancing Act: The company’s approach to balancing debt and equity is vital for sustainable growth and maintaining financial flexibility.

The York Water Company strategically manages its debt to optimize its capital structure. For instance, recent data highlights the company's efforts to maintain a balanced approach between debt and equity financing. This balance is crucial for sustaining growth while mitigating financial risks. The company’s investor relations often provide updates on these strategies, offering transparency to stakeholders.

The following table illustrates key components of The York Water Company's capital structure:

Credit ratings also play a crucial role in assessing the company’s financial health. These ratings, provided by agencies like Standard & Poor's and Moody's, reflect the company's ability to meet its financial obligations. Any changes in these ratings can impact the company’s borrowing costs and investor confidence.

In summary, The York Water Company's approach to debt and equity is a key factor in evaluating its financial health. A balanced strategy supports sustainable growth and provides a buffer against financial uncertainties. Investors should monitor these metrics to make informed decisions.

To gain more insight into investor behavior and ownership trends, check out: Exploring The York Water Company (YORW) Investor Profile: Who’s Buying and Why?

The York Water Company (YORW) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For The York Water Company (YORW), analyzing these metrics provides insights into its operational efficiency and financial stability.

Assessing The York Water Company (YORW)'s Liquidity:

To gauge The York Water Company's liquidity, we examine the current and quick ratios, working capital trends, and cash flow statements.

• Current and Quick Ratios: These ratios measure a company's ability to cover its short-term liabilities with its short-term assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventory from current assets, providing a more conservative measure.
• Analysis of Working Capital Trends: Working capital, defined as current assets minus current liabilities, indicates the company's operational liquidity. Monitoring the trends in working capital helps to identify whether the company is efficiently managing its short-term resources.
• Cash Flow Statements Overview: An overview of cash flow statements, including operating, investing, and financing activities, provides insights into how The York Water Company generates and uses cash.

Liquidity Positions

As of December 31, 2023, The York Water Company reported the following:

• Cash and cash equivalents: $2.49 million
• Current assets: $11.59 million
• Total assets: $429.22 million
• Current liabilities: $13.95 million
• Total liabilities: $238.22 million

Key liquidity ratios for the company are:

• Current Ratio: 0.83 (= $11.59 million / $13.95 million)

Cash Flow Statements Overview

The York Water Company’s cash flow activities for the year ending December 31, 2023, are as follows:

• Net cash provided by operating activities: $22.87 million
• Net cash used in investing activities: $25.48 million
• Net cash provided by financing activities: $3.74 million

Potential Liquidity Concerns or Strengths

Based on the 2023 data, The York Water Company's current ratio of 0.83 suggests a potential liquidity concern as current liabilities exceed current assets. However, the positive net cash flow from operating activities indicates the company's ability to generate cash from its core business operations, which is a strength. Monitoring these trends over time is crucial to assess the company's ongoing liquidity management.

Learn more about The York Water Company and its investors: Exploring The York Water Company (YORW) Investor Profile: Who’s Buying and Why?

The York Water Company (YORW) Valuation Analysis

Determining whether The York Water Company (YORW) is overvalued or undervalued requires a look at several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Currently, detailed real-time data for these specific ratios and analyst ratings as of April 2025 is not available in the search results. However, to provide a comprehensive valuation analysis, it's essential to consider these factors based on the most recent fiscal year data available, typically the 2024 fiscal year.

Here's how each of these metrics contributes to the valuation assessment:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share (EPS). A higher P/E ratio might suggest the stock is overvalued, while a lower P/E could indicate undervaluation, relative to industry peers or its historical average.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help investors determine whether they are paying too much for what would be left if the company went bankrupt immediately.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is used to assess the overall value of a company compared to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It’s particularly useful for comparing companies with different capital structures.

To illustrate, let’s consider how these metrics might be analyzed with hypothetical data. Note that the following figures are for illustrative purposes only and do not represent actual current data for The York Water Company:

Stock price trends over the last 12 months, or longer, offer insight into market sentiment and investor confidence. A consistent upward trend might suggest positive market perception, while a downward trend could indicate concerns about the company's performance or industry outlook.

Dividend yield and payout ratios are particularly relevant for utility companies like The York Water Company, which are often favored by income-seeking investors. The dividend yield indicates the annual dividend income relative to the stock price, while the payout ratio shows the proportion of earnings paid out as dividends. A sustainable payout ratio ensures the company can maintain its dividend payments.

Analyst consensus, typically expressed as buy, hold, or sell ratings, reflects the overall sentiment of financial analysts covering the stock. These ratings are based on in-depth analysis of the company's financials, industry trends, and macroeconomic factors. However, it’s important to consider that analyst ratings can vary and should be used as one input among many.

For more detailed insights, you might find this resource helpful: Breaking Down The York Water Company (YORW) Financial Health: Key Insights for Investors

The York Water Company (YORW) Risk Factors

Understanding the risks facing The York Water Company (YORW) is crucial for investors. These risks can be both internal and external, impacting the company's financial health and future performance. Factors such as industry competition, regulatory changes, and broader market conditions all play a significant role.

Here's an overview of some key risk areas:

• Regulatory and Environmental Risks: Water utilities are heavily regulated. Changes in environmental regulations or permit requirements can lead to increased compliance costs for The York Water Company. Additionally, the availability and quality of water resources are subject to environmental factors like droughts or contamination, which can impact operations.
• Operational Risks: Maintaining and upgrading infrastructure is essential for water utilities. The York Water Company faces risks related to aging infrastructure, potential leaks, and the need for continuous investment in system improvements. Unexpected equipment failures or service disruptions can also negatively affect the company's performance.
• Financial Risks: Interest rate fluctuations can impact The York Water Company's borrowing costs, affecting profitability. Economic downturns can also reduce demand from industrial and commercial customers, impacting revenue. Prudent financial management is necessary to navigate these challenges.

The York Water Company's annual report on Form 10-K, particularly the section on 'Risk Factors,' provides detailed insights into these and other potential risks. These filings with the Securities and Exchange Commission (SEC) offer a comprehensive look at the challenges and uncertainties the company faces. For example, the company's ability to manage operating expenses, maintain adequate water supply, and comply with environmental regulations are all critical factors discussed in these reports.

Mitigation strategies are often outlined in company filings and earnings reports. These may include proactive infrastructure maintenance programs, diversification of water sources, and hedging strategies to manage interest rate risk. By understanding these risks and the company's plans to address them, investors can make more informed decisions. To read more about The York Water Company (YORW) Financial Health: Key Insights for Investors, click here: Breaking Down The York Water Company (YORW) Financial Health: Key Insights for Investors

The York Water Company (YORW) Growth Opportunities

The York Water Company (YORW) has several potential avenues for future growth, stemming from strategic initiatives, market dynamics, and competitive advantages. Here's an analysis of these key growth drivers:

Key Growth Drivers:

• Infrastructure Investments: The company's consistent investment in upgrading and expanding its infrastructure ensures reliability and compliance with environmental regulations. These investments not only maintain service quality but also support future growth by increasing capacity and efficiency.
• Acquisitions: YORW has a history of strategic acquisitions of smaller water and wastewater systems. This approach allows them to expand their service territory and customer base, driving revenue growth.
• Rate Increases: The ability to secure rate increases from regulatory bodies is crucial for YORW. These increases help offset rising operating costs and fund infrastructure improvements, supporting long-term financial health.
• Service Area Expansion: Extending service to new developments and communities within their existing or adjacent territories presents a significant growth opportunity. This expansion leverages their existing infrastructure and expertise.

Future Revenue Growth Projections and Earnings Estimates:

While specific revenue growth projections and earnings estimates are subject to market conditions and regulatory decisions, several factors point to steady, if not spectacular, growth for The York Water Company (YORW):

• Consistent Demand: Water is an essential service, ensuring a stable and predictable demand regardless of economic fluctuations.
• Regulatory Support: A supportive regulatory environment that allows for timely rate adjustments is vital for maintaining profitability and funding capital expenditures.
• Operational Efficiency: Continuous improvements in operational efficiency can help control costs and boost earnings, even in the absence of significant revenue growth.

Strategic Initiatives and Partnerships:

Strategic initiatives and partnerships can play a crucial role in driving future growth for The York Water Company (YORW):

• Technology Adoption: Implementing advanced technologies for water treatment, distribution, and customer service can enhance efficiency and reduce operating costs.
• Public-Private Partnerships: Collaborating with municipalities on water and wastewater projects can provide access to new markets and revenue streams.
• To delve deeper into the foundational aspects of the company, explore: Mission Statement, Vision, & Core Values of The York Water Company (YORW).

Competitive Advantages:

The York Water Company (YORW) possesses several competitive advantages that position it favorably for future growth:

• Long-Standing Reputation: With a history dating back to 1816, YORW has a strong reputation for reliability and service quality, fostering customer loyalty.
• Regulated Monopoly: As a regulated utility, YORW operates as a monopoly in its service territory, providing a stable and protected market position.
• Local Expertise: Deep understanding of the local water resources, infrastructure, and regulatory landscape provides a competitive edge in managing operations and pursuing growth opportunities.

Financial Performance & Metrics:

Key financial metrics from the company's 2024 fiscal year provide insights into its current performance and future potential. For example, analyzing the revenue growth rate, net income, and capital expenditure plans can offer a clearer picture of the company's financial trajectory. Although I don't have access to real-time databases to provide exact figures, investors should consult the company's financial reports and investor presentations for the most up-to-date information.

The following table provides a hypothetical overview of key financial aspects. Please note that the values are illustrative and should not be considered factual.