Why Unitil (UTL) Could Deliver 5%-7% Annual EPS Growth

In a recent investor letter, First Pacific Advisors highlighted Unitil (NYSE:UTL) as a well-run and diversified utility serving New England. The company has been making attractive acquisitions, including Bangor Gas, Maine Natural Gas, and water utilities in New Hampshire and Maine, at roughly 1.25 times its rate base. Unitil's management believes it can continue to grow earnings per share (EPS) at a rate of 5% - 7% over the long term, which aligns with the utility's historical performance.

One of the fund managers expressed enthusiasm for the shares, though they cautioned that the company is small in size and has limited liquidity. Additionally, the fund mentioned that Unitil is not on their list of the 40 most popular stocks among hedge funds heading into 2026, with only 9 hedge funds holding the stock at the end of Q1 2026 compared to 14 in the previous quarter.

While acknowledging the risks associated with Unitil, the fund manager emphasized that they believe other AI stocks hold greater promise for delivering higher returns and doing so more quickly.