The York Water Company (NASDAQ: YORW)

The York Water Company (NASDAQ: YORW) is an investor-owned utility in the United States that provides water and wastewater services. Its main operations include collecting, purifying, and distributing water that meets or exceeds safe drinking standards. Additionally, the company owns and manages wastewater collection and treatment systems. It serves a franchised territory spanning parts of more than 59 communities across four counties in south-central Pennsylvania.

Recent Business and Financial Updates

• Revenue Growth and Earnings Decline: York Water Company reported operating revenues of USD 74.96 million for 2024, representing an increase of USD 3.93 million compared to 2023. The revenue growth was primarily driven by a rate increase effective March 1, 2023, revenues from the Distribution System Improvement Charge (DSIC), and an expanding customer base. However, despite the higher revenues, net income declined by USD 3.43 million to USD 20.33 million, and Basic and Diluted Earnings per Share (EPS) fell to USD 1.42, a decrease of USD 0.24 from the previous year.
• Impact of Expenses and Financial Factors: While the Company benefited from increased revenue and lower pension costs, these gains were offset by higher operational and maintenance expenses, increased depreciation, higher interest on debt, and a lower Allowance for Funds Used During Construction (AFUDC). AFUDC represents the cost of debt and equity funds used to finance plant construction, and its decline further impacted net income. Despite these challenges, dividends per share increased by 4% compared to 2023, reflecting the Company’s commitment to shareholder returns.
• Capital Investments and Infrastructure Improvements: During 2024, York Water invested USD 48.2 million in construction expenditures, focusing on key projects such as armoring and replacing the Lake Williams Dam spillway, wastewater treatment plant construction, and infrastructure upgrades. The Company replaced approximately 50,200 feet of pipe, improving its distribution system, reducing ongoing expenses, and enhancing customer service. Additionally, York Water allocated USD 783,000 toward the acquisition of four water and two wastewater systems, further expanding its service footprint.
• Fourth Quarter Performance: For the fourth quarter of 2024, operating revenues increased by USD 770,000 compared to the same period in 2023. However, net income declined by USD 870,000, bringing Basic and Diluted EPS for the quarter to USD 0.36, down USD 0.06 year-over-year. Revenue gains were primarily attributed to DSIC revenues and customer base growth, but these were outweighed by higher operational and maintenance costs, increased depreciation, and a lower AFUDC.
• Future Investment Plans: Looking ahead, York Water plans to invest approximately USD 46.0 million in 2025 and USD 48.5 million in 2026, excluding acquisitions. These investments will focus on main extensions, water tank replacement, wastewater treatment plant construction, and enterprise software system upgrades. Routine improvements to pipes, service lines, and other facilities will continue to ensure a safe, adequate, and reliable water supply while maintaining proper wastewater handling and disposal for its growing customer base.

Technical Observation (on the daily chart):

YORW is showing signs of a potential trend reversal after a prolonged downtrend, with the 21-day MA crossing above the 50-day MA, indicating short-term bullish momentum. RSI is nearing overbought levels at 68.70, suggesting possible consolidation or a pullback. Increased volume supports the recent price recovery, with key support around USD 30.00 and resistance near USD 34.00-USD 35.00. If momentum holds, further upside is possible, but caution is needed due to potential overbought conditions.

York Water Company demonstrated resilience in 2024, achieving revenue growth of USD 3.93 million to USD 74.96 million, driven by rate adjustments, infrastructure charges, and an expanding customer base. While net income declined due to increased operational costs and lower AFUDC, the Company maintained its commitment to long-term growth, investing USD 48.2 million in infrastructure, including pipeline replacements and wastewater system improvements. Additionally, dividends per share rose by 4%, reflecting confidence in financial stability. With planned investments of USD 46 million in 2025 and USD 48.5 million in 2026, York Water is positioning itself for sustained expansion, ensuring reliable service and enhanced shareholder value. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to The York Water Company (NASDAQ: YORW) at the closing market price of USD 33.56 as of March 04,2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is March 04,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.