| Small & micro cap project / Activism insight
Artesian Resources Corporation: Signs of moat
Artesian Resources operates as the holding company of eight wholly-owned subsidiaries offering water, wastewater and other services in Delaware, Maryland and Pennsylvania. The company’s principal subsidiary, Artesian Water Company, Inc., is the oldest and largest investor-owned public water utility on the Delmarva Peninsula, and has been providing superior water service since 1905.
Signs of Moat
- Franchised service areas are substantially free from direct competition
Artesian Water, the company’s principal subsidiary, is the oldest and largest public water utility in the State of Delaware, and has been providing a water service within the state since 1905. This segment produced approximately 88% of 2019 consolidated operating revenues. The company holds Certificates of Public Convenience and Necessity, or CPCNs, for approximately 288 square miles of exclusive water service territory, most of which is in Delaware and some in Maryland and Pennsylvania. The company was granted an exclusive franchise for each of its existing water and wastewater systems in Delaware.
- Recurring revenue: Given the nature of the business (sale of water), the company generates predictable recurring revenue.
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