CALIFORNIA WATER SERVICE GRP (CWT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CWT - US1307881029 - Common Stock
44.16 USD
-0.85 (-1.89%)
44.16 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to CWT. CWT was compared to 14 industry peers in the Water Utilities industry. CWT has a medium profitability rating, but doesn't score so well on its financial health evaluation. CWT has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year CWT was profitable.
- CWT had a positive operating cash flow in the past year.
- Each year in the past 5 years CWT has been profitable.
- In the past 5 years CWT always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 2.52%, CWT is doing worse than 64.29% of the companies in the same industry.
- The Return On Equity of CWT (8.21%) is comparable to the rest of the industry.
- CWT has a Return On Invested Capital of 3.26%. This is comparable to the rest of the industry: CWT outperforms 42.86% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CWT is below the industry average of 4.99%.
- The 3 year average ROIC (2.65%) for CWT is below the current ROIC(3.26%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.52% | ||
| ROE | 8.21% | ||
| ROIC | 3.26% |
ROA(3y)2.35%
ROA(5y)2.54%
ROE(3y)7.53%
ROE(5y)8.34%
ROIC(3y)2.65%
ROIC(5y)2.93%
1.3 Margins
- CWT has a Profit Margin of 13.71%. This is comparable to the rest of the industry: CWT outperforms 42.86% of its industry peers.
- CWT's Profit Margin has improved in the last couple of years.
- CWT has a Operating Margin of 21.11%. This is in the lower half of the industry: CWT underperforms 64.29% of its industry peers.
- In the last couple of years the Operating Margin of CWT has grown nicely.
- The Gross Margin of CWT (70.17%) is better than 78.57% of its industry peers.
- In the last couple of years the Gross Margin of CWT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.11% | ||
| PM (TTM) | 13.71% | ||
| GM | 70.17% |
OM growth 3Y15.39%
OM growth 5Y9.23%
PM growth 3Y12.91%
PM growth 5Y15.82%
GM growth 3Y2.57%
GM growth 5Y1.83%
2. Health
2.1 Basic Checks
- CWT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, CWT has more shares outstanding
- CWT has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, CWT has an improved debt to assets ratio.
2.2 Solvency
- CWT has an Altman-Z score of 0.85. This is a bad value and indicates that CWT is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of CWT (0.85) is worse than 64.29% of its industry peers.
- CWT has a Debt/Equity ratio of 0.88. This is a neutral value indicating CWT is somewhat dependend on debt financing.
- CWT has a Debt to Equity ratio of 0.88. This is in the better half of the industry: CWT outperforms 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.85 |
ROIC/WACC0.4
WACC8.2%
2.3 Liquidity
- A Current Ratio of 0.53 indicates that CWT may have some problems paying its short term obligations.
- The Current ratio of CWT (0.53) is worse than 78.57% of its industry peers.
- CWT has a Quick Ratio of 0.53. This is a bad value and indicates that CWT is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.50, CWT is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
- The earnings per share for CWT have decreased strongly by -33.82% in the last year.
- Measured over the past years, CWT shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.08% on average per year.
- CWT shows a strong growth in Revenue. In the last year, the Revenue has grown by 30.48%.
- The Revenue has been growing slightly by 7.73% on average over the past years.
EPS 1Y (TTM)-33.82%
EPS 3Y18.6%
EPS 5Y20.08%
EPS Q2Q%0%
Revenue 1Y (TTM)30.48%
Revenue growth 3Y9.44%
Revenue growth 5Y7.73%
Sales Q2Q%3.9%
3.2 Future
- The Earnings Per Share is expected to grow by 0.68% on average over the next years.
- The Revenue is expected to grow by 4.01% on average over the next years.
EPS Next Y-28.45%
EPS Next 2Y-11.72%
EPS Next 3Y-6.26%
EPS Next 5Y0.68%
Revenue Next Year-0.78%
Revenue Next 2Y2.77%
Revenue Next 3Y3.04%
Revenue Next 5Y4.01%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 19.28 indicates a rather expensive valuation of CWT.
- Based on the Price/Earnings ratio, CWT is valued a bit cheaper than 71.43% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, CWT is valued a bit cheaper.
- With a Price/Forward Earnings ratio of 17.33, CWT is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CWT indicates a somewhat cheap valuation: CWT is cheaper than 71.43% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of CWT to the average of the S&P500 Index (24.26), we can say CWT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.28 | ||
| Fwd PE | 17.33 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CWT is valued cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.9 |
4.3 Compensation for Growth
- CWT has a very decent profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as CWT's earnings are expected to decrease with -6.26% in the coming years.
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y-11.72%
EPS Next 3Y-6.26%
5. Dividend
5.1 Amount
- CWT has a Yearly Dividend Yield of 2.60%.
- Compared to an average industry Dividend Yield of 2.91, CWT has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, CWT pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
5.2 History
- The dividend of CWT is nicely growing with an annual growth rate of 7.26%!
- CWT has been paying a dividend for at least 10 years, so it has a reliable track record.
- CWT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.26%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- CWT pays out 52.43% of its income as dividend. This is a bit on the high side, but may be sustainable.
- CWT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.43%
EPS Next 2Y-11.72%
EPS Next 3Y-6.26%
CALIFORNIA WATER SERVICE GRP / CWT FAQ
What is the fundamental rating for CWT stock?
ChartMill assigns a fundamental rating of 4 / 10 to CWT.
What is the valuation status for CWT stock?
ChartMill assigns a valuation rating of 4 / 10 to CALIFORNIA WATER SERVICE GRP (CWT). This can be considered as Fairly Valued.
How profitable is CALIFORNIA WATER SERVICE GRP (CWT) stock?
CALIFORNIA WATER SERVICE GRP (CWT) has a profitability rating of 6 / 10.
What is the expected EPS growth for CALIFORNIA WATER SERVICE GRP (CWT) stock?
The Earnings per Share (EPS) of CALIFORNIA WATER SERVICE GRP (CWT) is expected to decline by -28.45% in the next year.
Can you provide the dividend sustainability for CWT stock?
The dividend rating of CALIFORNIA WATER SERVICE GRP (CWT) is 6 / 10 and the dividend payout ratio is 52.43%.