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Reasons to Add Essential Utilities (WTRG) to Your Portfolio Now
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Essential Utilities Inc.’s (WTRG - Free Report) long-term capital expenditure plans and strategic municipal asset acquisitions will further boost its performance. These initiatives help the company to serve the expanding customer base efficiently. Given its growth opportunities, WTRG makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share (EPS) is pinned at $2.00, indicating a year-over-year increase of 7.4%.
The Zacks Consensus Estimate for 2024 sales is pinned at $2.35 billion, indicating year-over-year growth of 4.8%.
WTRG’s long-term (three to five years) earnings growth rate is 5.6%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Essential Utilities’ ROE is 8.52%, higher than the sector’s average of 7.39%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Debt Position
Currently, Essential Utilities’ total debt to capital is 53.47%, better than the industry’s average of 54.16%.
The time to interest earned ratio at the end of third-quarter 2023 was 2.5. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The utility company has been consistently increasing shareholders’ value through dividend payments. It has been paying dividends for the past 79 years and has increased the dividend 33 times in the past 32 years. Currently, its quarterly dividend is 30.71 cents per share, resulting in an annualized dividend of $1.2284. Currently, its dividend yield is 3.21%, better than the industry’s average of 2.22%.
Systematic Investments
Essential Utilities will continue to make systematic investments to further strengthen its water, wastewater and natural gas infrastructure. The company plans to invest $3.3 billion from 2023 through 2025 to fortify operations and efficiently serve the expanding customer base.
Price Performance
In the past month, shares of Essential Utilities have risen 7.1% against the industry’s 32.1% decline.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.
AWK’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for 2024 EPS is pegged at $5.16, implying a year-over-year increase of 6.8%.
The Zacks Consensus Estimate for CWT’s 2024 EPS is pinned at $2.25, implying a year-over-year improvement of 17.8%. The Zacks Consensus Estimate for 2024 sales implies year-over-year growth of 3.2%.
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Reasons to Add Essential Utilities (WTRG) to Your Portfolio Now
Essential Utilities Inc.’s (WTRG - Free Report) long-term capital expenditure plans and strategic municipal asset acquisitions will further boost its performance. These initiatives help the company to serve the expanding customer base efficiently. Given its growth opportunities, WTRG makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share (EPS) is pinned at $2.00, indicating a year-over-year increase of 7.4%.
The Zacks Consensus Estimate for 2024 sales is pinned at $2.35 billion, indicating year-over-year growth of 4.8%.
WTRG’s long-term (three to five years) earnings growth rate is 5.6%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, Essential Utilities’ ROE is 8.52%, higher than the sector’s average of 7.39%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility sector.
Debt Position
Currently, Essential Utilities’ total debt to capital is 53.47%, better than the industry’s average of 54.16%.
The time to interest earned ratio at the end of third-quarter 2023 was 2.5. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
The utility company has been consistently increasing shareholders’ value through dividend payments. It has been paying dividends for the past 79 years and has increased the dividend 33 times in the past 32 years. Currently, its quarterly dividend is 30.71 cents per share, resulting in an annualized dividend of $1.2284. Currently, its dividend yield is 3.21%, better than the industry’s average of 2.22%.
Systematic Investments
Essential Utilities will continue to make systematic investments to further strengthen its water, wastewater and natural gas infrastructure. The company plans to invest $3.3 billion from 2023 through 2025 to fortify operations and efficiently serve the expanding customer base.
Price Performance
In the past month, shares of Essential Utilities have risen 7.1% against the industry’s 32.1% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Consolidated Water Co. Ltd. (CWCO - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and American Water Works (AWK - Free Report) and California Water Service Group (CWT - Free Report) , both carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CWCO’s long-term earnings growth rate is 8%. The company delivered an average earnings surprise of 61.6% in the last four quarters.
AWK’s long-term earnings growth rate is 7.76%. The Zacks Consensus Estimate for 2024 EPS is pegged at $5.16, implying a year-over-year increase of 6.8%.
The Zacks Consensus Estimate for CWT’s 2024 EPS is pinned at $2.25, implying a year-over-year improvement of 17.8%. The Zacks Consensus Estimate for 2024 sales implies year-over-year growth of 3.2%.