Essential Utilities’ High-Impact Strategy: What 700,000 Smart Meters Could Unlock!

Essential Utilities, Inc. has presented a transformative quarter, marked by a notable 32% growth in earnings per share year-over-year and several strategic undertakings. A key highlight is the merger with American Water, expected to significantly enhance the company’s footprint, serving over 5 million connections across 17 states and strengthening its position as a premier water and wastewater utility firm. This merger is anticipated to deliver synergies and present a robust investment case with projected growth rates in earnings per share and dividends of 7% to 9%, propelled by ongoing infrastructure investments. The quarter’s financial performance was robust, with a revenue increase of 9.6%, driven largely by rate increases across Essential Utilities’ Water and Natural Gas businesses. Earnings per share for the quarter stood at $0.33, fueled by rate adjustments and decreased tax expenses, which were partly counteracted by elevated depreciation, amortization, interest, and operational costs.