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WTRG (Essential Utilities) Degree of Operating Leverage : 0.61 (As of Mar. 2025)


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What is Essential Utilities Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. Essential Utilities's Degree of Operating Leverage for the quarter that ended in Mar. 2025 was 0.61. The higher Degree of Operating Leverage, the higher operating risk the company will take.

The industry rank for Essential Utilities's Degree of Operating Leverage or its related term are showing as below:

WTRG's Degree of Operating Leverage is ranked better than
54.3% of 488 companies
in the Utilities - Regulated industry
Industry Median: 0.835 vs WTRG: 0.61

Essential Utilities Degree of Operating Leverage Historical Data

The historical data trend for Essential Utilities's Degree of Operating Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Essential Utilities Degree of Operating Leverage Chart

Essential Utilities Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
Degree of Operating Leverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.54 1.37 0.43 -0.37 14.30

Essential Utilities Quarterly Data
Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24 Mar25
Degree of Operating Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.13 -0.91 -1.08 14.30 0.61

Competitive Comparison of Essential Utilities's Degree of Operating Leverage

For the Utilities - Regulated Water subindustry, Essential Utilities's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Essential Utilities's Degree of Operating Leverage Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, Essential Utilities's Degree of Operating Leverage distribution charts can be found below:

* The bar in red indicates where Essential Utilities's Degree of Operating Leverage falls into.


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Essential Utilities Degree of Operating Leverage Calculation

Essential Utilities's Degree of Operating Leverage for the quarter that ended in Mar. 2025 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 892.801 (Mar. 2025) / 811.081 (Mar. 2024) - 1 )/( 2257.67 (Mar. 2025) / 1939.443 (Mar. 2024) - 1 )
=0.1008/0.1641
=0.61***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


Essential Utilities  (NYSE:WTRG) Degree of Operating Leverage Explanation

Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.

A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.

Be Aware

The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.


Essential Utilities Degree of Operating Leverage Related Terms

Thank you for viewing the detailed overview of Essential Utilities's Degree of Operating Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Essential Utilities Business Description

Traded in Other Exchanges
Address
762 W. Lancaster Avenue, Bryn Mawr, PA, USA, 19010-3489
Essential Utilities is a Pennsylvania-based holding company for US water, wastewater, and natural gas distribution utilities. The company's water business serves 3 million people in eight states. Its largest service territory is in Pennsylvania, primarily suburban Philadelphia. Its Peoples subsidiary serves more than 740,000 gas distribution customers in Pennsylvania and Kentucky. It completed the sale of its West Virginia gas utility and the bulk of its nonregulated assets in 2024.
Executives
Chris Franklin officer: Aqua America Southern Oper 762 W.LANCASTER AVE, BRYN MAWR PA 19010
Robert A Rubin officer: Chief Accounting Officer 762 W LANCASTER AVE, BRYN MAWR PA 19010
Elizabeth B Amato director UNITED TECHNOLOGIES CORPORATION, 10 FARM SPRINGS ROAD, FARMINGTON CT 06032
Roderick K West director 1600 PERDIDO STREET, BLDG 505, NEW ORLEANS LA 70112
Arnold Colleen officer: President 762 W. LANCASTER AVENUE, BRYN MAWR PA 19010
Michael Huwar officer: President 762 W. LANCASTER AVENUE, BRYN MAWR PA 19010
Ellen T Ruff director 762, W LANCASTER AVE, BRYN MAWR PA 19010
Wilbert Bryan Lewis director 762 W. LANCASTER AVENUE, BRYN MAWR PA 19010
Daniel Schuller officer: Executive Vice President 40 SACHEM ROAD, GREENWICH CT 06830
David Alan Ciesinski director H. J. HEINZ COMPANY, P.O. BOX 57, PITTSBURGH PA 15230
Edwina Kelly director 510 MADISON AVENUE, 15FL, NEW YORK NY 10022
Richard Scott Fox officer: Chief Operating Officer 14812 BALLANTYNE COUNTRY CLUB DRIVE, CHARLOTTE NC 28277
Matthew Rhodes officer: EVP, Strategy & Corp Dev 762 LANCASTER AVE, BRYN MAWR PA 19010
Wendy Franks director ONE QUEEN STREET EAST, SUITE 2500, TORONTO A6 M5C 2W5
Hilferty Daniel J Iii director C/O FS INVESTMENT CORPORATION III, CIRA CENTRE, 2929 ARCH STREET, SUITE 675, PHILADELPHIA PA 19104