Research · Sep 3, 2026
[WTRG] Essential Utilities Thesis 2026: Regulated Water Cycle Drives Natural Gas Rate Base Growth
Essential Utilities, Inc. (NYSE: WTRG) FY2025 revenue ~$2.30-2.45B (+5-9%) with adj. EPS ~$2.00-2.15 reflecting continued post-2024 ~$1.30-1.40B aggregate Regulated Water revenue (~57%+ aggregate revenue mix; selected primary 8 states including Pennsylvania + New Jersey + Ohio + Texas + Illinois) + selected continued post-2024 ~$1.00-1.05B aggregate Regulated Natural Gas revenue (~43% aggregate revenue mix; selected primary post-March 2020 Peoples Natural Gas $4.275B+ acquisition; selected primary Pennsylvania + Kentucky + West Virginia natural gas distribution) under continued Chairman + President + CEO Christopher Franklin since July 2015 (~10-year tenure; selected post-March 2020 Peoples Natural Gas acquisition + 2020 Aqua America → Essential Utilities rebrand). One of the largest US regulated water + natural gas utility holding companies. Founded 1886 as Springfield Consolidated Water Company in Springfield Pennsylvania (~139-year heritage); selected post-1955 NYSE listing; selected post-March 2020 ~$4.275B+ Peoples Natural Gas acquisition; selected post-July 2015 Christopher Franklin Chairman + CEO appointment. Headquartered in Bryn Mawr Pennsylvania; ~3,400+ employees globally with ~$2.30-2.45B revenue. Two primary business segments: Regulated Water (~57%+ ~$1.30-1.40B), Regulated Natural Gas (~43% ~$1.00-1.05B). Geographic mix: US ~100%; selected primary Pennsylvania ~50%+. Regulated Water rate base cycle (8-state water utility): ~$1.30-1.40B Regulated Water revenue; ~5.5M+ water + wastewater customers; ~+5-7% aggregate Regulated Water rate base growth; ~9.5-10.5% aggregate authorized ROE. Regulated Natural Gas + post-March 2020 Peoples Gas integration: ~$1.00-1.05B Regulated Gas revenue; ~750K+ aggregate gas customers; ~+5-7% aggregate Regulated Gas rate base growth. Chairman + President + CEO Christopher Franklin since July 2015 (~10-year tenure); CFO Daniel Schuller. Capital return: ~$1.31 annual dividend FY2025 (~+5-7% growth post-2024 dividend acceleration; ~80-year continuous dividend track post-1940s); minimal opportunistic buybacks; aggregate capital return ~$370-420M FY2025; net leverage ratio ~57-60% debt-to-capital; investment-grade Baa1/A- credit rating. FY2026 thesis: Regulated Water rate base cycle + Regulated Natural Gas + post-March 2020 Peoples Gas integration + ~$1.31 annual dividend + ~80-year continuous dividend track + ~$370-440M aggregate annual capital return + ~$1.0-1.2B aggregate annual rate base CapEx. Risks: American Water Works + American States Water + California Water Service + Middlesex Water + NiSource + UGI + Atmos Energy + Southwest Gas competition, state regulatory commission rate case + authorized ROE compression, environmental compliance + PFAS regulatory considerations, Peoples Gas integration considerations.