Unitil Corporation (UTL)

Unitil Corporation (UTL): Expanding Utility Powerhouse with 10% Rate Base Growth and Rising Dividends
Unitil Corporation (UTL) – a key utility operator in New England, providing design, operation, and development of electric and natural gas distribution networks for more than 198,000 customers across New Hampshire, Massachusetts, and Maine. The company serves a wide range of consumers—from households and small businesses to industrial clients—and implements large-scale infrastructure projects focused on network modernization and customer base growth, including strategic acquisitions to expand into new regions and segments. The headquarters is located in Hampton, New Hampshire.
Investment Highlights:

• Strategic acquisitions expanding company scale. In 2025, Unitil completed and fully integrated the acquisitions of Bangor Natural Gas and Maine Natural Gas, adding around 15,000 customers and $140 million to its rate base. In addition, in November, the company received approval to acquire three Aquarion Water subsidiaries, enabling entry into the water utility segment with an additional ~23,000 customers and over $85 million in rate base. After integration in 2025, Unitil’s total customer base will reach approximately 236,000, and its combined rate base will grow by more than $220 million. According to updated management forecasts, the annual rate base growth from 2025 onward is expected to average around 10% per year, driven by both organic expansion and new acquisitions. These transactions were completed at valuation multiples comparable to the best deals in the industry, supporting long-term returns.
  
• Supportive regulatory environment. Unitil operates in states with favorable regulation (New Hampshire, Massachusetts, and Maine), which provide mechanisms for rapid capital cost recovery (cost recovery, capital trackers) and revenue stabilization against volume fluctuations (revenue decoupling). This minimizes earnings volatility and sustains investment growth. In 2025, Maine also enacted a fuel choice law, further enhancing opportunities in the gas segment.
  
• Accelerated growth and major investment program. Management reaffirmed guidance for annual EPS growth of 5–7% and rate base growth of 10% per year, including newly integrated assets. The capital plan has been raised to $1 billion for 2025–2029, with investments focused on grid renewal, modernization, energy transition projects, and expansion into new business areas such as water utilities. To finance this program, the company raised $74.8 million through an additional equity issuance in 2025.
  
• Reliable and growing dividend. Unitil demonstrates exemplary financial discipline and strong shareholder commitment, making its dividend profile one of the strongest in the sector. The recent announcement of an increase in the quarterly dividend to $0.45 per share (annualized rate of $1.80) represents a 5.9% year-over-year increase and continues the company’s long-standing tradition of consistent dividend growth. This growth is supported by a stable business model and a conservative payout ratio of around 60%, ensuring dividend safety and room for further increases.
  

Target price: $55