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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3255
Positioning
Market Dominance
Transportation, Communications, Electric, Gas, And Sanitary Services
Utilities
$11.2B
Christopher H. Franklin
Essential Utilities, Inc. operates regulated utilities that provide water, wastewater, or natural gas services in the United States. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry. It serves approximately 7.5 million residential water, commercial water, fire protection and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky.
Headcount
3.2K
HQ Base
BRYN MAWR, Pennsylvania
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Dates updated upon official exchange announcement.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UGP ULTRAPAR HOLDINGS INC | 79 | 90 | 95 | 87 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$TNK TEEKAY TANKERS LTD. | 78 | 94 | 97 | 82 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$DHT DHT Holdings, Inc. | 75 | 84 | 88 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$STNG Scorpio Tankers Inc. | 75 | 86 | 95 | 74 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NAT NORDIC AMERICAN TANKERS Ltd | 75 | 82 | 88 | 87 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AMX AMERICA MOVIL SAB DE CV/ | 74 | 86 | 81 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$PAC Pacific Airport Group | 73 | 94 | 80 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GSL Global Ship Lease, Inc. | 73 | 82 | 94 | 81 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$TRMD TORM plc | 73 | 86 | 94 | 65 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$VIV TELEFONICA BRASIL S.A. | 73 | 82 | 90 | 78 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$WTRG Essential Utilities, Inc. | 42 | 25 | 27 | 37 | 19.8x | 8.7x | 8.1% | 2.9% | 60.1% | 37.6% | 23.1% | 9.8% | 3.3% | 177.0x | $11.2B | ||
| SECTOR BENCH | - | - | - | - | - | 16.9x | 6.1x | 11.9% | 3.2% | 52.6% | 14.8% | 7.7% | 4.2% | 1.4% | 1.3x | - | REF |
Essential Utilities, Inc. (WTRG) receives a "Reduce" rating with a composite score of 42.2/100. It ranks #3255 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Lagging peers — losers tend to keep underperforming
Expensive relative to fundamentals — limited margin of safety
Weak fundamentals — higher risk of value trap
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Transportation, Communications, Electric, Gas, And Sanitary Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for WTRG.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 25 | 11 | +14ALPHA |
| MOMENTUM | 37 | 29 | +8ALPHA |
| VALUATION | 27 | 17 | +10ALPHA |
| INVESTMENT | 34 | 40 | -6DRAG |
| STABILITY | 87 | 90 | -3NEUTRAL |
| SHORT INT | 63 | 72 | -9DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 2.0% vs WACC 6.1% (spread -4.0%)
GM 60% vs sector 53%, OM 38% vs sector 15%
Capital turnover 0.06x
Rev growth 10%, 10yr history
Interest coverage 2.1x, Net debt/EBITDA 28.7x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Essential Utilities, Inc. (WTRG) as a Reduce with a composite score of 42.2/100 at a current price of $39.45. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Essential Utilities, Inc. holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.2/100 places it at rank #3255 in our full universe.
No Moat
Medium
Standard
Fair Value
Gross margins of 60% signal strong pricing power.
Stable competitive position in a defensive sector.
Leverage of 177% D/E amplifies downside risk.
Below-average quality raises earnings sustainability concerns.
Vulnerability to macroeconomic shocks and interest rate volatility.
Essential Utilities, Inc. represents a reduce based on multi-factor quantitative performance.
Essential Utilities, Inc. receives a Reduce rating from our analysis, with a composite score of 42.2/100 and 2 out of 5 stars, ranking #3255 out of 7,333 stocks. WTRG's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
WTRG's quality score of 25/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 8.1% (sector avg: 11.9%), gross margins of 60.1% (sector avg: 52.6%), net margins of 23.1% (sector avg: 7.7%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
WTRG registers a value score of just 27/100, suggesting the stock trades at a significant premium to its fundamental metrics. Key valuation metrics include a P/E ratio of 19.80x, an EV/EBITDA of 8.70x, a P/B ratio of 1.61x. High-premium valuations like this require strong future execution to avoid multiple compression, and downside risk is elevated if growth disappoints.
Essential Utilities, Inc.'s investment score of 34/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 9.8% vs. a sector average of 4.2% and a return on assets of 2.9% (sector: 3.2%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
WTRG is currently showing below-average momentum at 37/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at 9.8% year-over-year, while a beta of -0.10 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
Essential Utilities, Inc. earns an excellent stability score of 87/100, reflecting low price volatility and a conservatively managed balance sheet. Key stability metrics include a beta of -0.10 and a debt-to-equity ratio of 177.00x (sector avg: 1.3x). Stocks with this level of stability tend to act as portfolio anchors, providing downside protection during market corrections while still participating in broad market advances.
WTRG carries a short interest score of 63/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include elevated leverage (D/E: 177.00x). At $11.2B market cap (large-cap), Essential Utilities, Inc. offers reasonable institutional liquidity.
WTRG pays a solid dividend yield of 3.3%, contributing an income component to total returns. This compares to a sector average dividend yield of 1.4%. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
Essential Utilities, Inc. is a large-cap company in the Transportation, Communications, Electric, Gas, And Sanitary Services sector, ranked #0 of 50 in its sector (100th percentile) and #3255 of 7,333 overall (56th percentile). Key comparisons include ROE of 8.1% trailing the 11.9% sector median and operating margins of 37.6% above the 14.8% sector average. This top-quartile standing reflects exceptional competitive strength relative to Transportation, Communications, Electric, Gas, And Sanitary Services peers.
While WTRG currently exhibits a REDUCE profile, superior opportunities exist within the TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS, AND SANITARY SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Transportation, Communications, Electric, Gas, And Sanitary Services Alpha →Quant Factor Profile
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Improvement in Quality (25) would have the largest impact on the composite score.
EV/EBITDA 42% ABOVE SECTOR MEDIAN
ROE 32% BELOW SECTOR MEDIAN
Gross Margin 14% ABOVE SECTOR MEDIAN (FAVORABLE)
Above 50MA
37.18%
Net New Highs
+51081
Visa, Kenvue, and Essential Utilities are three dividend stocks that can perform well even if economic conditions worsen. Visa's resilient business model, Kenvue's value opportunity in its skin health segment, and Essential Utilities' regulated water and wastewater services make them attractive options for recession-wary investors.
American Water Works Company (NYSE:AWK) and Essential Utilities shareholders have overwhelmingly approved an all stock, tax free merger. The combined company will operate under the American Water name and is expected to become the largest regulated water and wastewater utility in the United States. The merger is targeted to close by the end of Q1 2027, subject to regulatory approvals across the involved jurisdictions. For you as an investor following NYSE:AWK, this vote is a key corporate...
AWK misses Q4 EPS estimates but tops revenues and reaffirms 2026 guidance amid major capital spending plans.
American Water Works Company, Inc. (NYSE:AWK) is one of the best infrastructure stocks to buy right now. On February 10, shareholders of American Water Works Company, Inc. (NYSE:AWK) and Essential Utilities Inc. (NYSE:WTRG) approved merger-related proposals at special meetings held that day. According to American Water, at least 99% of its shares present voted to […]
American Water Works and Essential Utilities have agreed to an all-stock, tax-free merger creating a $40 billion water and wastewater utility serving 4.7 million connections across 17 states, with the deal expected to close by Q1 2027.