UTES Virtus Reaves Utilities ETF

Virtus Reaves Utilities ETF (UTES) currently reports 19 stock positions (subject to change), placing it in the highly focused range by holdings breadth. The top line-up is TLN (10.08%), CEG (9.89%), VST (9.34%), with TLN as the largest single weight at 10.08%. Together, the top three holdings account for 29.31%, which points to a relatively flat weight distribution where no single cluster of names dominates outcomes. The weight distribution suggests a portfolio designed to capture thematic upside while avoiding excessive dependence on any single name outside the largest positions.

Assessing the quality of returns on invested capital, ROIC is 4.60%, WACC is 6.78%, and the economic spread is -2.18%. On balance, the portfolio's businesses are not clearing their capital cost hurdle, meaning reinvestment may be diluting rather than compounding value. Supporting metrics show ROE at 12.42% and ROA at 3.06%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a portfolio that likely needs operating improvement before returns quality can be considered durable.

The current pricing of the underlying holdings reads trailing P/E of 24.23, forward P/E of 19.37, PEG of 1.82. The small spread between trailing and forward P/E suggests neither meaningful acceleration nor deterioration is currently priced into the earnings outlook. The PEG ratio signals a portfolio priced at reasonable growth-adjusted value — adequate for the earnings outlook, without offering an obvious margin of safety. The current ratio of 0.96 is below average, suggesting some holdings may face tighter short-term financial conditions. In aggregate, the valuation reads as fair to moderately stretched — leaving the investment case dependent on earnings execution rather than multiple expansion.

Looking at margins from gross to free cash flow, gross margin sits at 40.64%, operating margin at 19.55%, and free cash flow margin at 13.10%. Gross margins are constructive — not exceptional, but indicative of businesses with reasonable unit economics. At this level, operating margins reflect businesses that are scaling with discipline without dramatic cost pressure. The portfolio's cash conversion is middle-of-the-road — sufficient for operational needs, but leaving limited surplus for discretionary allocation. Together, these margins describe a portfolio where business quality varies — and where macro or sector headwinds could disproportionately impact the weaker-margin holdings.

Projected 12-month EPS growth of 25.1% adds a powerful forward signal — analyst consensus expects earnings to accelerate materially, which, if delivered, could make current multiples look increasingly modest. Turning to growth and analyst expectations, TTM revenue growth of 34.71% pointing to sustained and broad-based revenue growth within the basket, while the estimated 12-month price change of 19.37%, where target prices point to mid-range appreciation potential from current levels. The distinction matters: revenue growth tells you what the businesses are doing, price targets tell you what analysts think the market will pay for it. Ultimately, the alignment between revenue momentum and analyst targets will depend on execution quality and the broader rate and sentiment environment. The estimated 12-month price change is a weighted composite of analyst price target estimates adjusted by each holding's ETF weight, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

Taken together, the metrics present a favorable setup — not without risk, but with enough quality and momentum to support a positive view.

These findings are based solely on the metrics presented and do not constitute an investment recommendation. Always perform your own due diligence before committing capital.