WTRG - Essential Utilities: A High-Quality Dividend Grower To Buy At A Discount

2024-03-29 07:00:00 ET

Summary

• Essential Utilities has boosted its dividend 33 times in the past 32 years.
• The water utility's diluted EPS climbed higher in Q4.
• Essential Utilities flexed its impressive balance sheet to refinance $500 million of long-term debt at attractive rates.
• The water utility's shares could currently be priced 33% below fair value.
• Moving forward, Essential Utilities could deliver high-single digit annual dividend growth, while also generating decent total returns.

It's been said quite a few times before that there are no guarantees in investing. However, I believe it especially bears repeating in this ongoing bull market.

The S&P 500's ( SP500 ) forward EV/EBITDA multiple of 14.2 is around 6% above the 10-year average of 13.5. To be clear, the market is a bit overvalued but hardly that outrageously expensive in my view....

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