Essential Utilities Inc
🇺🇸 WTRG · NYSE/NASDAQ · US29670G1022
Utilities
USD 37.01 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
16.9
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 37.01 ÷ 2.20 = 16.9
TTM period through: 2025-12-31
Forward P/E (estimated): 16.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 19.1
Yield (Fwd)
3.70%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.57%
Div. Growth (5Y CAGR)
7.8%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
6.1x
Latest quarter: 19.9x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2026-03-31): 19.9x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.4%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 60.6%
Cash Flow Payout (TTM): 37.0%
FCF Coverage (TTM): -1.12x
ROE
8.3%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
14.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Essential Utilities is a premier regulated water and wastewater monopoly offering highly predictable revenues and a flawless long-term dividend growth record. While the underlying business quality is excellent and the 3.6% yield remains secure, the pending all-stock merger with American Water Works effectively pegs the valuation to the acquirer and caps independent upside. Existing shareholders should maintain positions to collect the reliable income through the transition, but the merger dynamics limit the standalone opportunity for new capital.
Sector Context
Essential Utilities operates as a regulated water and wastewater service provider, functioning as a natural monopoly in its service territories. Water utilities are highly capital-intensive businesses that often run negative free cash flow to fund infrastructure improvements, but they offer exceptionally stable, regulated returns and highly predictable dividend streams.
📊 Strategy Analysis
- • Exceptional business quality as a regulated water utility monopoly with a 10-year flawless dividend consistency score and 5.7% 5-year revenue CAGR.
- • Sustainable dividend profile with a 3.57% yield and a well-managed 68.3% TTM payout ratio, backed by a decades-long track record of consecutive dividend increases.
- • Attractive valuation on a cash-flow basis with a P/FFO of 9.95x, highlighting the true earnings power of its heavy infrastructure asset base.
⚠ What to Watch
- • The pending all-stock merger with American Water Works fundamentally pegs the share price to the acquirer's performance, capping independent upside potential.
- • Elevated Net Debt/EBITDA of 6.08x and persistent negative free cash flow require ongoing reliance on debt markets to fund essential infrastructure upgrades.
- • Current P/E of 16.85x sits above the preferred 8-15x value strategy range, though this premium is common for high-quality water monopolies.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.