Essential Utilities, Inc.’s WTRG rising earnings estimates and customer growth through strategic asset acquisitions make it a great investment in the utility sector. The increasing water demand is also likely to boost the company’s performance.
Currently, the company carries a Zacks Rank #2 (Buy). Let’s look at the factors that are driving the stock.
Growth Projections
The Zacks Consensus Estimate for WTRG’s 2024 and 2025 earnings indicates year-over-year growth of 5.91% and 6.94%, respectively.
The company’s long-term (three to five years) earnings growth is pinned at 5.75%.
Surprise History & Dividend Details
Essential Utilities has a positive earnings surprise history. Its trailing four-quarter earnings surprise is 0.39%, on average.
The company has paid shareholders a cash dividend on its common stock for 79 years and has increased the dividend 33 times in the past 32 years. Its current dividend yield is 3.28%, better than the industry average yield of 2.35%.
Investments & Customer Additions
WTRG is making continuous investments to improve its water and natural gas infrastructure. The company plans to invest $1.3-1.4 billion in 2024 for infrastructure developments and $7.2 billion by 2028. It is committed to lowering emissions from natural gas, water and wastewater operations and aims to reduce annual Scope 1 and 2 emissions by 60% within 2035 from 2019 levels.
In 2023, WTRG completed seven acquisitions, which added 11,025 customers. The company expects the customer base in the water segment to expand 2-3% annually over the long term.
Price Performance
Shares of Essential Utilities have gained 2.1% in the past three months compared with the industry’s 2% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the sector are California Water Service Group CWT, UGI Corporation UGI, and Vistra Corporation VST. California Water Service Group and Vistra currently sport a Zacks Rank #1 (Strong Buy) each, while UGI Corporation carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
California Water has delivered an average earnings surprise of 85.16% in the last four quarters. The Zacks Consensus Estimate for earnings for 2024 earnings indicates year-over-year growth of 246.15%.
The Zacks Consensus Estimate for Vistra’s 2024 and 2025 earnings per share increased nearly 3.95% and 18.24%, respectively, in the last 30 days. The Zacks Earnings ESP is currently pinned at 995.24%.
UGI has delivered an average earnings surprise of 19.13% in the last four quarters. The consensus estimate for earnings for 2024 and 2025 has gone up 0.69% and 0.32% respectively, in the last 90 days.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>UGI Corporation (UGI) : Free Stock Analysis Report
California Water Service Group (CWT) : Free Stock Analysis Report
Vistra Corp. (VST) : Free Stock Analysis Report
Essential Utilities Inc. (WTRG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
