Middlesex Water Company (MSEX) vs Essential Utilities Inc. (WTRG)

Middlesex Water Company and Essential Utilities Inc. are both Utilities Regulated Water companies. Essential Utilities Inc. is the larger, with a market value of $12.5B against $1.1B — 11.4× the size. Middlesex Water Company trades at the lower P/E: 20.8× against 22.5×. Essential Utilities Inc. grew revenue faster over the last twelve months: 9.86% against 8.95%. Middlesex Water Company has the higher net margin (24.5% vs 21.6%) and the higher return on invested capital (4.28% vs 3.63%). Both pay a dividend; Essential Utilities Inc. yields more (3.97% vs 3.16%). Across the 22 metrics below, Middlesex Water Company leads on 13 and Essential Utilities Inc. on 9.

Valuation

Metric MSEX WTRG Utilities Regulated Water median
P/E 20.80 22.46 22.15
P/S 5.16 4.86 4.37
P/B 2.00 1.78 1.75
Price to free cash flow n/m n/m —
EV/EBITDA 15.53 15.67 14.76
EV/Sales 7.03 8.17 6.19
Earnings yield 4.81% 4.45% 4.52%
Free cash flow yield (3.57%) (4.08%) (4.03%)

Profitability

Metric MSEX WTRG Utilities Regulated Water median
Gross margin 100.00% 82.59% 74.78%
Operating margin 30.53% 35.06% 31.19%
Net margin 24.47% 21.60% 20.32%
Free cash flow margin (18.43%) (19.84%) (17.70%)
Return on equity 10.09% 8.08% 9.21%
Return on assets 3.71% 2.88% 3.34%
Return on invested capital 4.28% 3.63% 4.26%

Growth

Metric MSEX WTRG Utilities Regulated Water median
Revenue growth (TTM) 8.95% 9.86% 8.39%
EPS growth (last fiscal year) (4.45%) 1.38% (0.37%)
Revenue growth, 5-year CAGR 6.58% 11.09% 6.91%
Net income growth, 5-year CAGR 2.22% 16.69% 10.09%

Health

Metric MSEX WTRG Utilities Regulated Water median
Debt to equity 0.73 1.21 0.84
Current ratio 0.51 0.78 1.00
Net debt to EBITDA 4.42 6.16 4.59

Dividend

Metric MSEX WTRG Utilities Regulated Water median
Dividend yield 3.16% 3.97% 2.99%
Payout ratio 0.66 0.89 0.66

Size

Metric MSEX WTRG Utilities Regulated Water median
Market cap 1.10b 12.50b 2.04b

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