American Water Works Company, Inc. (AWK) vs Essential Utilities Inc. (WTRG)

American Water Works Company, Inc. and Essential Utilities Inc. are both Utilities Regulated Water companies. American Water Works Company, Inc. is the larger, with a market value of $26.1B against $11.3B — 2.3× the size. Essential Utilities Inc. trades at the lower P/E: 20.2× against 22.7×. Essential Utilities Inc. grew revenue faster over the last twelve months: 9.86% against 6.92%. Essential Utilities Inc. has the higher net margin (21.6% vs 21.4%) and the lower return on invested capital (3.63% vs 4.70%). Both pay a dividend; Essential Utilities Inc. yields more (3.40% vs 2.28%). Across the 22 metrics below, American Water Works Company, Inc. leads on 11 and Essential Utilities Inc. on 11.

Valuation

Metric AWK WTRG Utilities Regulated Water median
P/E 22.69 20.17 20.64
P/S 4.86 4.37 4.37
P/B 2.20 1.60 1.91
Price to free cash flow n/m n/m —
EV/EBITDA 13.84 14.72 14.48
EV/Sales 7.56 7.67 6.20
Earnings yield 4.41% 4.96% 4.83%
Free cash flow yield (4.01%) (4.54%) (4.54%)

Profitability

Metric AWK WTRG Utilities Regulated Water median
Gross margin 100.00% 82.59% 71.91%
Operating margin 36.94% 35.06% 29.22%
Net margin 21.35% 21.60% 20.19%
Free cash flow margin (19.49%) (19.84%) (19.49%)
Return on equity 10.10% 8.08% 9.00%
Return on assets 3.21% 2.88% 3.21%
Return on invested capital 4.70% 3.63% 4.08%

Growth

Metric AWK WTRG Utilities Regulated Water median
Revenue growth (TTM) 6.92% 9.86% 6.92%
EPS growth (last fiscal year) 5.57% 1.38% —
Revenue growth, 5-year CAGR 6.36% 11.09% 7.24%
Net income growth, 5-year CAGR 9.40% 16.69% 9.40%

Health

Metric AWK WTRG Utilities Regulated Water median
Debt to equity 1.24 1.21 0.93
Current ratio 0.52 0.78 1.01
Net debt to EBITDA 5.10 6.16 4.42

Dividend

Metric AWK WTRG Utilities Regulated Water median
Dividend yield 2.28% 3.40% 2.27%
Payout ratio 0.56 0.65 0.55

Size

Metric AWK WTRG Utilities Regulated Water median
Market cap 26.14b 11.28b 997.03m

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