H2O America vs Essential Utilities
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KIRA’s take AI analyst
I put H2O America and Essential Utilities side by side, using each one’s latest annual report. Here is what stands out:
- Essential Utilities is the larger business, with $2.5B of revenue in fiscal 2025 against $801M for H2O America, about 3.1 times as much.
- Essential Utilities grew revenue faster (18.6%, against 7.0%).
- Essential Utilities kept more of each dollar of sales as operating profit (37.2% operating margin, against 22.2%).
- Essential Utilities earned a higher return on the capital invested in it (6.4%, against 4.9%).
- Investors pay more for each dollar of Essential Utilities’s earnings: a P/E of 21.8x against 20.2x for H2O America.
Who comes out ahead
Of the 9 measures where higher (or lower) is clearly better, how many each company leads.
H2O America
HTO
0/9
Essential Utilities
WTRG
9/9
Revenue growth5-year growthOperating marginNet marginReturn on capitalReturn on equityPiotroski F-scoreNet debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | HTO FY25 | WTRG FY25 |
|---|---|---|
| Size | ||
| Market cap | $2.3B | $12.1B |
| Revenue | $801M | $2.5B |
| Free cash flow | — | −$420M |
| Net income | $103M | $616M |
| Growth | ||
| Revenue growth | 7.0% | 18.6% |
| 5-year growth | 7.2% | 11.1% |
| Share count change | 7.1% | 2.3% |
| Profitability | ||
| Gross margin | — | — |
| Operating margin | 22.2% | 37.2% |
| Net margin | 12.8% | 24.9% |
| FCF margin | — | −17.0% |
| Return on capital | 4.9% | 6.4% |
| Return on equity | 7.1% | 9.4% |
| Balance sheet | ||
| Net debt | $1.9B | $8.1B |
| Net debt / EBITDA | 6.3x | 6.1x |
| Dividends and buybacks | $58.6M | $376M |
| Valuation & quality | ||
| P/E | 20.2x | 21.8x |
| Piotroski F-score | 4 | 5 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.