Forensic Analysis · Water Utilities · as of Nov 8, 2026
H2O America (HTO)
A forensic read on H2O America built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
B · Sound & dependable
Forensic grade
Clean
Earnings quality
4
Forensic signals
7.1%
ROE
7.0%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
H2O America earns a B (Sound & dependable) forensic quality grade. 4 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
3.4%
FY2025
Return on invested capital.Return on invested capital is 3.4% in the latest fiscal year and steady across FY2023–FY2025, inside a 0.3-point range. After-tax operating profit was $134M in FY2023 and $158M in FY2025, with operating income at 22.3% of revenue in FY2023, 22.8% in FY2024 and 22.2% in FY2025. The capital base behind it grew +15% across FY2023–FY2025, from $4.0B to $4.6B, and the return did not fall doing it, so the dollars added over that window earned at least the 3.3% the older base was already earning.
+5.3%/yr
FY2023–FY2025
Share-count dilution.Diluted share count changed +11% over the last 2 years to FY2025 (+5.3%/yr). The count is growing — 31.7M shares in FY2023, 35.1M in FY2025: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~5.3% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~10%.
0.8% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 0.8% of revenue in FY2025 — about $0.18 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 5.3% a year across FY2023–FY2025 and that rate is not falling, so total profit has to grow by that much annually before any of it reaches a share. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
+10.6%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +10.6% relative to their own average in FY2025 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by PP&E up +30% against revenue +7%. A cash-flow measure on the same base disagrees: reported earnings ran in line with operating cash by 4% of net operating assets, against an accruals ratio of 10.6%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
Key fundamentals
Latest Revenue$800.6M
Revenue Growth YoY+7.0%
Revenue CAGR (2yr)+9.3%
Net Margin12.8%
Return on Equity7.1%
Debt / Equity1.23x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from H2O America's actual 10-K/10-Q/8-K filings?