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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Essential Utilities, Inc. (XNYS:WTRG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WTRG
Name:
Essential Utilities, Inc. (XNYS:WTRG)
Sector:
127.28M
Industry:
Utilities�Regulated Water
CEO:
Mr. Christopher H. Franklin
Total Employees:
3,211
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -69.76% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ESSENTIAL UTILITIES, INC.(WTRG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED WATER INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
49.16
One Month Price Target:
$49.36
Six Month Price Target :
$50.33
Likely Price in One Year's Time:
Ticker:
$51.51
Likely Trading Range Today Under (Normal Volatility)
$49.
Price Upper limit ($) :
$49.36
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$47.
This week:
$44.33
This month :
$39.49
Other Primary facts
Market Cap:
12.86B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
262.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.63%
-12.91%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$59.19
$54.59
$39.13
$43.73
Medium risk (<10%) entry points
Buy Call
Sell Call
$53.10
Buy Put:
Sell Put:
$52.12
$45.21
$46.20
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WTRG
Sharpe Ratio:
1.15%
Comparison:
WTRG, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -30.87% lower than the industry
& is -49.37% lower than the market/S&P 500 average
Average Returns/Yield of
WTRG
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.68%
Yearly returns:
11.13%
Comparison of returns:
Average annual returns/yield (last 3 years) is -27.21% below industry average
Classification:
WTRG, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.82
Statistical test of Returns:
WTRG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.16%
Weekly Volatility:
4.82%
Monthly Volatility:
9.65%
Yearly Volatility:
33.43%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.24%
Volatility in last five trading days has been -42.30% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.40%
Weekly VaR:
-9.83%
Monthly VaR:
-19.67%
How Much Can the price of
WTRG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-68.13%
This translates to price declining to:
$40.80
This translates to price declining to:
$15.67
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
WTRG is a 38.81% riskier investment compared to the market/S&P 500 & is 18.91% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.65% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WTRG
Beta in relation to market/S&P 500--0.71
Expected beta in 1 year's time:
0.623
Expected beta in 3 year's time:
0.881
Unlevered (debt free) Beta:
0.705
Beta in relation to Nasdaq (XNAS):
0.659
Beta in relation to all global stocks::
0.837
Beta Comparison & Analysis
Beta of competitors/peers::
0.852
Beta is -16.51% lower than peers
Average Industry Beta:
0.545
Beta is 30.46% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.97%
Sustainable growth rate is -36.46% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.001
Alpha is -98.14% below industry average alpha yield
Alpha is 5% compared to market & is healthy
Analysis of Cost of Capital of
WTRG
Equity cost of capital:
0.080
Equity cost of capital is 16.52% above industry mean WACC
Unlevered (without debt) cost of capital:
7.95%
Before-tax cost of debt:
119.86%
After-tax cost of debt:
94.69%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
94.69%
WACC is 53.58% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$7.61
Revenue growth rate per share of (3Y):
2.45
Annual revenue growth rate is 187.00% above the industry average
EPS:
$1.72
Expected Annual growth rate of EPS (3Y):
16.16%
Expected future EPS growth rate is 32.60% higher than the Utilities�Regulated Water industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 17.77%
Equity growth rate per share is -16.21% lower than the industry
Debt per share
$0.17
EBITDA per share
$3.55
Valuation Analysis Today of
WTRG
P/E Ratio:
29.49
P/E Ratio of Competitors/Peers:
15.1
P/E ratio is 95.27% higher than main peers & is 5.30% higher than the industry
Stock price/value with industry average P/E ratio: $48.17
WTRG is 2.07% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $32.93
Present value of the expected future dividends only: $16.42
P/S (Price to Sales ratio):
6.46
Price to sales ratio is -27.59% below the industry mean
P/B (Price to book value ratio):
2.45
-
-
Net income growth rate (3Y):
60.13%
Net income growth rate is 12.95% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 0.92%
Dividend yeild: 2.18%
Previous Dividend: $0.27
Previous adjusted dividend: $0.27
Previous Dividend: $1.07
Expected next dividend best case: $0.28
Expected next dividend worst case: $0.26
Average dividend payment (long-term): $0.25
Average dividend increase/decrease (growth rate) % per period: 1.40%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 20/06/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 21/03/2022
Dividend History:
2022-05-12--$0.27
2021-11-10--$0.27
2021-05-13--$0.25
2022-02-10--$0.27
2021-08-12--$0.27
2021-02-11--$0.25
Dividend growth rate is -82.12% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
0.84%
Net debt to equity ratio:
2.23%
Debt to assets ratio:
0.30%
Net debt to assets ratio:
0.79%
Debt-to-asset ratio is -99.60% below industry average
Ability to repay debt:
Interest coverage ratio:
4.41
Interest coverage ratio is 71.10% more than industry average
Looking forward:
Debt growth rate:
4.59%
Annual debt growth is -51% lower than industry average debt growth rate
Debt repayment rate in last quarter: 60.40%
Analysis of Key Statistics
Correlation of price movement with the market:
0.673
Statistical significance of correlation:
WTRG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.56
Stock price is 20.15% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.56
Correlation of price movement with Nasdaq (^IXIC):
0.019
Covariance of price movement with the market:
0.024
Kurtosis
15.883
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.703
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
WTRG
Gross Profit Margin Ratio:
156%
Operating Profit Margin Ratio:
29.99%
Operating profit margin is 20.94% higher than the industry
Net Profit Margin Ratio:
156%
Effective Tax Rate:
-7.60%
Effective tax rate is -164.86% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
8.51%
Return on equity (ROE) is -19.01% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.01%
Return on assets (ROA) is -10.75% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0.65
Current ratio is -5.01% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 15.3 years
Stock based compensation to net income ratio:
0.61%
In-depth Efficiency Analysis
Revenue generated per employee:
620.9K
Each employee generates 15% more revenue than industry average revenue per employee
EBITDA generated per employee:
289.5K
Each employee generates -1% less EBITDA than industry average revenue per employee
Profit generated per employee:
139.3K
Each employee generates -10% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
39.6K
Each employee generates -580% less free cash flow than industry average revenue per employee
Assets/Capital per employee
4.5M
Each employee generates -580% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WTRG
NI-PB
BRAZILIAN ELECTRIC POWER COMPANY (XNYS:EBR)
BRAZILIAN ELECTRIC POWER COMPANY (XNYS:EBR)
BROOKFIELD RENEWABLE PARTNERS UNT (XNYS:BEP)
CNP-PB
PINNACLE WEST CAPITAL CORPORATION (XNYS:PNW)
UGI CORPORATION (XNYS:UGI)
Algonquin Power & Utilities Corp. (XNYS:AQN)
ATMOS ENERGY CORPORATION (XNYS:ATO)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.99B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
633.61M
660.97M
-
-
-
-
762.25M
762.25M
2.61M
210.58M
303.35M
929.62M
597.99M
447.30M
415.69M
- 31611.00K
447.30M
Statement of Cash Flow
Date:
Period:
78.35M
Differed Income Tax :
- 19774.00K
Stock Based Compensation :
2.73M
Change in Working Capital :
49.92M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
310.60M
Investments in PP&E:
- 183322.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
58.30M
-
58.30M
182.59M
38.56M
164.07M
443.52M
10.44B
2.34B
5.57M
-
-
1.65B
14.43B
-
14.88B
161.51M
131.75M
-
-
384.92M
678.18M
43.95M
7.42B
8.94B
-
9.62B
128.14M
1.50B
-
3.63B
March 31, 2022 at 6:00:00 AM
924.22M
5.26B
14.88B
-
175.69M
117.4M
-
- 49910.00K
- 233232.00K
- 67023.00K
-
- 1012.00K
- 4117.00K
42.51M
- 29641.00K
-
47.73M
58.30M
10.57M
310.60M
- 183322.00K
127.28M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WTRG
2023
2024
2025
2026
2027
$54.47
$57.07
$59.79
$62.65
$65.65