10 Most Profitable Utility Stocks to Buy Now

2. Essential Utilities, Inc. (NYSE:WTRG)

Net Profit Margin: 28.54%

One of the few pure-play water utilities in the US for over 50 years was Essential Utilities, Inc. (NYSE:WTRG), previously Aqua America. However, in March 2020, it diversified its earnings mix and increased its size by about 50% with the $4.3 billion acquisition of Peoples Natural Gas.

The firm increased its 2024 GAAP earnings per share from $1.86 to $2.17. The non-GAAP earnings per share were $1.97, which was consistent with the $1.96 to $2.00 projection. Additionally, Essential Utilities, Inc. (NYSE:WTRG) won rate cases for natural gas and water in Pennsylvania, which account for 75% of operations. Weather normalization was implemented, and both stockholders and customers benefited from the January 2025 changes.

The company has spent more than $1.3 billion in 2024 alone, out of a total of over $5.4 billion since 2020, for infrastructure improvements in nine states. These initiatives include improving water pressure systems, replacing outdated pipelines, eliminating lead service lines, and modernizing treatment facilities. Essential Utilities, Inc. (NYSE:WTRG) intends to invest $1.4 billion in 2025, with a total of $7.8 billion by 2029. Its net profit margin grew by 28.54%, making it on our list of the  Best Utility Stocks. 

The firm was raised from Hold to Buy by Jefferies on January 28. Essential Utilities, Inc. (NYSE:WTRG)’s price objective was set at $41. The stock was upgraded due to anticipated water purchases, particularly in Pennsylvania, and significant compliance-related spending. Jefferies projected a 20% total shareholder return and 6.4% annual growth through 2029, maintaining its 2024 and 2025 EPS estimates at $1.98 and $2.15.