Artesian Resources is a $368 million Delmarva Peninsula water and wastewater utility, and this quarter the rate-driven levers moved in the right direction. Revenue rose 7.4% to $30.7 million, operating income rose 9.7% to $8.6 million, and diluted earnings per share rose 4.9% to $0.64 from $0.61. Year-to-date: revenue up 7.4% to $58.4 million, net income up 6.7% to $12.5 million, diluted EPS up 6.1% to $1.21. The drivers were exactly the ones a regulated water utility names in its own MD&A: temporary rate increases allowed under Delaware law, a growing customer count (metered Delaware customers up 1.8% year over year, Maryland up 1.5%), an industrial wastewater contract, and an annual reset of the Service Line Protection Plan fee. Shares rose to a 52-week high of $35.70 on August 13, 2026, the day after the print, up from the March 20, 2026 low of $30.50.
The two stories worth separating are the rate case and the capex program. The company has submitted for an aggregate annualized $9.0 million Delaware water rate increase (10.2% of revenue) and is currently operating under two of the three Delaware temporary rate steps, with the third step (a 75%-of-requested level, capped at 15% of gross water sales) automatically available twelve months after the April 4, 2025 submission. The company is in a Delaware Public Service Commission proceeding that, on Delaware's new temporary-rate structure effective July 13, 2026, allows progressively larger interim rate increases. The 12-month capex run-rate is roughly $51.7 million (annualized H1 of $25.9 million), most of it PFAS treatment upgrades, lead service line inventory compliance, and a new Sussex County regional wastewater treatment plant that came on line in Q1 2026. The third new piece is a separate wastewater treatment facility with a DNREC permit received in February 2026, sized at 1,250,000 gallons per day. The central question is not whether the next quarter is a beat - water utilities are not quarter-to-quarter stories - it is whether Artesian can carry the 7%-ish revenue growth, a 6.5%-ish EPS trajectory, a 1.6x P/B multiple, and a 3.4% dividend yield through a 2026-2027 window in which the rate case resolves, PFAS capex peaks, and a third (and biggest) Delaware temporary rate step may be the difference between a 5%-EPS-growth utility and an 8%-EPS-growth utility.