Essential UtilitiesMEX:WTRG 71 Interest Coverage is 3.56 as of Mar. 2026, which is 28% above its 10-year median of 2.79. GuruFocus rates MEX:WTRG with a GF Score™ of 71/100. The stock has 7 warning signs investors should review. Among 447 Utilities - Regulated companies, Essential Utilities ranks worse than 62.19% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Essential Utilities's
Operating Income
for the
three
months ended in Mar. 2026 was MXN5,601.68 Mil. Essential Utilities's Interest Expense for the
three
months ended in Mar. 2026 was MXN-1,574.38 Mil.
Essential Utilities's interest coverage for the quarter that ended in Mar. 2026 was 3.56.
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. Essential Utilities Inc interest coverage is 2.67, which is low.
The historical rank and industry rank for Essential Utilities's Interest Coverage or its related term are showing as below:
MEX:WTRG'
s Interest Coverage Range Over the Past 10 Years
Min: 2.31 Med: 2.79 Max: 4.14
Current: 2.67
MEX:WTRG's Interest Coverage is ranked worse than 62.19% of 447
companies
in the Utilities - Regulated industry
Industry Median: 3.78
vs MEX:WTRG: 2.67
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Essential Utilities Interest Coverage Related Terms
Essential Utilities Interest Coverage Historical Data
* Premium members only.
The historical data trend for Essential Utilities's Interest Coverage 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.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
MEX:WTRG vs AWR, CWT, HTO: Interest Coverage Comparison
For the Utilities - Regulated Water subindustry, Essential Utilities's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Essential Utilities's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Essential Utilities's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* 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.
Essential Utilities (MEX:WTRG) has a Interest Coverage of 3.56 as of Mar. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Essential Utilities and its competitors. This is 28% above median its historical median of 2.79. Over the past decade, Essential Utilities' Interest Coverage has ranged from 2.31 to 4.14. According to the industry distribution chart, Essential Utilities ranks #278 out of 447 companies in the Utilities - Regulated industry, placing it in the top 62.2%.
Is Essential Utilities' Interest Coverage too high?
Essential Utilities' current Interest Coverage of 3.56 is 28% above median its 10-year median of 2.79. Over the past 10 years, this metric has ranged from a low of 2.31 to a high of 4.14. The Utilities - Regulated industry median Interest Coverage is 3.78. Essential Utilities' value of 3.56 is 5.8% below this industry median. Based on the distribution chart, Essential Utilities ranks #278 out of 447 companies in the Utilities - Regulated industry, which is below the industry midpoint. Overall, Essential Utilities has a GF Score™ of 71/100, reflecting its overall financial health beyond just this single metric.
How does Essential Utilities' Interest Coverage compare to AWR and CWT?
According to the Utilities - Regulated industry distribution chart, Essential Utilities ranks #278 out of 447 companies for Interest Coverage. This places Essential Utilities in the lower half of its industry. The industry median Interest Coverage is 3.78. Essential Utilities' value of 3.56 is 5.8% below this benchmark. Historically, Essential Utilities' own Interest Coverage has ranged from 2.31 to 4.14 over the past decade. While the company's 10-year median is 2.79 vs. the industry median of 3.78, Essential Utilities has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for an Utilities - Regulated company?
The median Interest Coverage among Utilities - Regulated companies is 3.78, based on 447 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Essential Utilities's current Interest Coverage of 3.56 is 5.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Essential Utilities and its competitors. For the Utilities - Regulated industry, the median Interest Coverage is 3.78 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Essential Utilities's current Interest Coverage is 3.56, which is 28% above median its own 10-year median of 2.79. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Essential Utilities stock overvalued right now?
Essential Utilities (MEX:WTRG) has a current Interest Coverage of 3.56. The current Interest Coverage is 3.56, which is 28% above median its 10-year median of 2.79 and 5.8% below the Utilities - Regulated industry median of 3.78. Essential Utilities' overall GF Score™ is 71/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Essential Utilities (MEX:WTRG), the current Interest Coverage is 3.56 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
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. Essential shareholders would own a 31% stake in American Water Works if the proposed all-stock merger closes in 2027.
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