Is Essential Utilities, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Essential Utilities, Inc. has moved from expensive to fair. Based on the current metrics, the company appears fairly valued. Key ratios include a P/E ratio of 17, an EV to EBITDA of 14.79, and a Price to Book Value of 1.65. In comparison, American States Water Co. has a higher P/E of 22.76, while SJW Group has a P/E of 17.09, indicating that Essential Utilities is competitively positioned within its peer group.
Despite its fair valuation, Essential Utilities has underperformed relative to the S&P 500 over longer periods, with a 5-year return of -1.43% compared to the S&P 500's 91.29%. However, it has shown stronger performance year-to-date with a return of 13.57% against the S&P 500's 13.30%.