10 High Growth Utility Stocks To Invest In

7. Essential Utilities (NYSE:WTRG)  

5-Year Revenue CAGR: 17.86%  

No of Hedge Fund Investors: 9  

Essential Utilities (NYSE:WTRG), previously known as Aqua America, is a water and natural gas utility company serving several U.S. states. The company operates primarily in regulated markets, offering water, wastewater, and natural gas distribution services.

In Q2, Essential Utilities (NYSE:WTRG) results were decent, despite weather headwinds, and the company’s guidance for 2024 remains encouraging. The company’s five-year capital spending plan can deliver 8% annual rate base growth for the regulated water segment and 10% annual rate base growth for the regulated natural gas segment, providing a realistic path to its adjusted diluted EPS growth target.

The company’s positive rate case outcomes on the horizon, including the Peoples Gas rate case in Pennsylvania and the Pennsylvania water rate case, can provide a boost to its annual operating revenue. Essential Utilities’ (NYSE:WTRG) strong financial health, with a debt-to-capital ratio of between 50% and 55% and an interest coverage ratio of 3.3, supports its dividend growth.

Essential Utilities (NYSE:WTRG) is a high-quality dividend stock that offers a safe and reliably growing dividend. The company’s strong balance sheet, high-interest coverage ratio and positive rate case outcomes on the horizon make it an attractive investment opportunity. The company’s earnings are projected to increase by 9.23% in the current year. With a consensus Buy rating from industry analysts, the stock has a target price of $46.00, which represents a 16% upside potential from its current level.