Aristotle Capital Boston, LLC, an investment advisor, released its “Small/Mid Cap Equity Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. small/mid-cap equities reported solid results in the third quarter, driven by a favorable macroeconomic backdrop. In the third quarter, the strategy delivered a return of 2.57% net of fees (3.07% gross of fees), underperforming the 9.00% total return of the Russell 2500 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its third-quarter 2025 investor letter, Aristotle Capital Small/Mid Cap Equity Strategy highlighted stocks such as Essential Utilities, Inc. (NYSE:WTRG). Essential Utilities, Inc. (NYSE:WTRG) is a US-based regulated utilities operator that provides water, wastewater, and natural gas services. The one-month return of Essential Utilities, Inc. (NYSE:WTRG) was -2.60%, and its shares gained 1.04% of their value over the last 52 weeks. On October 31, 2025, Essential Utilities, Inc. (NYSE:WTRG) stock closed at $39.03 per share, with a market capitalization of $10.947 billion.
Aristotle Capital Small/Mid Cap Equity Strategy stated the following regarding Essential Utilities, Inc. (NYSE:WTRG) in its third quarter 2025 investor letter:
“Essential Utilities, Inc. (NYSE:WTRG), is a Pennsylvania-based utility providing water, wastewater, and natural gas services across nine states through its Aqua and Peoples Gas subsidiaries. Rate base expansion should continue to be driven by ongoing infrastructure investments and municipal water system acquisitions. A favorable regulatory landscape in the company’s core markets, including Pennsylvania and Texas, supports operational stability and consistent dividend growth. The company is a designated “Dividend Aristocrat”, having raised its dividend for 34 straight years.”
Essential Utilities, Inc. (NYSE:WTRG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held Essential Utilities, Inc. (NYSE:WTRG) at the end of the second quarter, up from 25 in the previous quarter. In the second quarter of 2025, Essential Utilities, Inc. (NYSE:WTRG) reported revenues of $514.9 million compared to $434.4 million in Q2 2024. While we acknowledge the potential of Essential Utilities, Inc. (NYSE:WTRG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
