Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Essential Utilities, Inc. (WTRG)

Company Dividend Discount ModelIndustry: Regulated WaterSector: Utilities

Valuation Snapshot

Stable Growth$405.20 - $477.39$447.38
Multi-Stage$98.38 - $107.73$102.97
Blended Fair Value$275.18
Current Price$37.14
Upside640.92%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.94%11.94%1.241.141.040.930.840.680.540.510.470.44
YoY Growth--9.34%9.76%11.59%11.21%23.37%25.06%7.16%7.44%7.98%8.15%
Dividend Yield--3.15%3.09%2.37%1.82%1.87%1.66%1.50%1.48%1.46%1.37%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)668.45
(-) Cash Dividends Paid (M)366.25
(=) Cash Retained (M)302.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)133.6983.5650.13
Cash Retained (M)302.20302.20302.20
(-) Cash Required (M)-133.69-83.56-50.13
(=) Excess Retained (M)168.51218.64252.06
(/) Shares Outstanding (M)278.47278.47278.47
(=) Excess Retained per Share0.610.790.91
LTM Dividend per Share1.321.321.32
(+) Excess Retained per Share0.610.790.91
(=) Adjusted Dividend1.922.102.22
WACC / Discount Rate5.55%5.55%5.55%
Growth Rate5.50%6.50%7.50%
Fair Value$405.20$447.38$477.39
Upside / Downside991.00%1,104.59%1,185.38%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)668.45711.90758.17807.45859.94915.83943.31
Payout Ratio54.79%61.83%68.87%75.92%82.96%90.00%92.50%
Projected Dividends (M)366.25440.19522.19612.99713.39824.25872.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate5.55%5.55%5.55%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)413.11417.02420.94
Year 2 PV (M)459.91468.67477.52
Year 3 PV (M)506.67521.22536.04
Year 4 PV (M)553.38574.66596.55
Year 5 PV (M)600.04629.02659.11
PV of Terminal Value (M)24,862.5526,063.4227,310.25
Equity Value (M)27,395.6628,674.0230,000.41
Shares Outstanding (M)278.47278.47278.47
Fair Value$98.38$102.97$107.73
Upside / Downside164.89%177.25%190.08%

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