Essential Utilities Return On Equity vs. Current Valuation
| WTRG Stock | USD 40.28 0.24 0.60% |
Return On Equity | First Reported 2010-12-31 | Previous Quarter 0.08449975 | Current Value 0.12 | Quarterly Volatility 0.02793701 |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 0.65 | 0.5482 |
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| Net Profit Margin | 0.14 | 0.2426 |
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| Operating Profit Margin | 0.43 | 0.337 |
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| Pretax Profit Margin | 0.31 | 0.2102 |
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| Return On Assets | 0.0371 | 0.0296 |
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| Return On Equity | 0.12 | 0.0845 |
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For Essential Utilities profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Essential Utilities to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Essential Utilities utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Essential Utilities's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Essential Utilities over time as well as its relative position and ranking within its peers.
Essential |
Essential Utilities' Revenue Breakdown by Earning Segment
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Is Water Utilities space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Essential Utilities. If investors know Essential will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Essential Utilities listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.17) | Dividend Share 1.247 | Earnings Share 1.99 | Revenue Per Share 7.169 | Quarterly Revenue Growth 0.058 |
The market value of Essential Utilities is measured differently than its book value, which is the value of Essential that is recorded on the company's balance sheet. Investors also form their own opinion of Essential Utilities' value that differs from its market value or its book value, called intrinsic value, which is Essential Utilities' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Essential Utilities' market value can be influenced by many factors that don't directly affect Essential Utilities' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Essential Utilities' value and its price as these two are different measures arrived at by different means. Investors typically determine if Essential Utilities is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Essential Utilities' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Essential Utilities Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Essential Utilities's current stock value. Our valuation model uses many indicators to compare Essential Utilities value to that of its competitors to determine the firm's financial worth. Essential Utilities is rated below average in return on equity category among its peers. It is rated first in current valuation category among its peers reporting about 204,927,213,359 of Current Valuation per Return On Equity. At this time, Essential Utilities' Return On Equity is most likely to slightly decrease in the upcoming years. Comparative valuation analysis is a catch-all technique that is used if you cannot value Essential Utilities by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.Essential Current Valuation vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Essential Utilities |
| = | 0.0902 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
Essential Utilities |
| = | 18.48 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Essential Current Valuation vs Competition
Essential Utilities is rated first in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Utilities industry is at this time estimated at about 29.41 Billion. Essential Utilities totals roughly 18.48 Billion in current valuation claiming about 63% of Utilities industry.
Essential Utilities Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Essential Utilities, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Essential Utilities will eventually generate negative long term returns. The profitability progress is the general direction of Essential Utilities' change in net profit over the period of time. It can combine multiple indicators of Essential Utilities, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Operating Income | 692.1 M | 726.7 M | |
| Net Income | 498.2 M | 523.1 M | |
| Income Tax Expense | -66.4 M | -63.1 M | |
| Total Other Income Expense Net | -260.3 M | -247.3 M | |
| Income Before Tax | 431.8 M | 453.4 M | |
| Net Income From Continuing Ops | 477.7 M | 315.4 M | |
| Non Operating Income Net Other | 32 M | 33.6 M | |
| Net Income Applicable To Common Shares | 535 M | 297.4 M | |
| Interest Income | 3.5 M | 3.3 M | |
| Net Interest Income | -275.7 M | -262 M | |
| Change To Netincome | 15.1 M | 27.1 M | |
| Net Income Per Share | 1.86 | 1.96 | |
| Income Quality | 1.87 | 2.07 | |
| Net Income Per E B T | 1.15 | 0.61 |
Essential Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Essential Utilities. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Essential Utilities position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Essential Utilities' important profitability drivers and their relationship over time.
Use Essential Utilities in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Essential Utilities position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Essential Utilities will appreciate offsetting losses from the drop in the long position's value.Essential Utilities Pair Trading
Essential Utilities Pair Trading Analysis
The ability to find closely correlated positions to Essential Utilities could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Essential Utilities when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Essential Utilities - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Essential Utilities to buy it.
The correlation of Essential Utilities is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Essential Utilities moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Essential Utilities moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Essential Utilities can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Essential Utilities position
In addition to having Essential Utilities in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Dynamically calculated list of top equities currently trending upward via a buy-out by investors. The Most Shorted Equities theme has 273 constituents at this time.
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Check out Your Current Watchlist. For more detail on how to invest in Essential Stock please use our How to Invest in Essential Utilities guide.You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
To fully project Essential Utilities' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Essential Utilities at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Essential Utilities' income statement, its balance sheet, and the statement of cash flows.