CALIFORNIA WATER SERVICE GRP (CWT) Stock Fundamental Analysis
NYSE:CWT - New York Stock Exchange, Inc. - US1307881029 - Common Stock - Currency: USD
We assign a fundamental rating of 3 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 is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
CWT had positive earnings in the past year.
In the past year CWT had a positive cash flow from operations.
Each year in the past 5 years CWT has been profitable.
Each year in the past 5 years CWT had a positive operating cash flow.
1.2 Ratios
CWT's Return On Assets of 2.52% is on the low side compared to the rest of the industry. CWT is outperformed by 64.29% of its industry peers.
Looking at the Return On Equity, with a value of 8.21%, CWT is doing worse than 64.29% of the companies in the same industry.
CWT has a Return On Invested Capital (3.26%) which is comparable to the rest of the industry.
CWT had an Average Return On Invested Capital over the past 3 years of 2.65%. This is below the industry average of 5.00%.
The last Return On Invested Capital (3.26%) for CWT is above the 3 year average (2.65%), which is a sign of increasing profitability.
| 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 worse Profit Margin (13.71%) than 64.29% of its industry peers.
CWT's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 21.11%, CWT is not doing good in the industry: 64.29% of the companies in the same industry are doing better.
CWT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 70.17%, CWT is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
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.
CWT has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, CWT has more shares outstanding
CWT has a better debt/assets ratio than last year.
2.2 Solvency
CWT has an Altman-Z score of 0.86. This is a bad value and indicates that CWT is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.86, CWT is not doing good in the industry: 64.29% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.88 indicates that CWT is somewhat dependend on debt financing.
With a decent Debt to Equity ratio value of 0.88, CWT is doing good in the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.86 |
ROIC/WACC0.42
WACC7.73%
2.3 Liquidity
CWT has a Current 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.
CWT has a worse Current ratio (0.53) 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.
CWT has a worse Quick ratio (0.50) than 78.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
CWT shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -20.46%.
The Earnings Per Share has been growing by 20.08% on average over the past years. This is a very strong growth
Looking at the last year, CWT shows a small growth in Revenue. The Revenue has grown by 0.62% in the last year.
Measured over the past years, CWT shows a small growth in Revenue. The Revenue has been growing by 7.73% on average per year.
EPS 1Y (TTM)-20.46%
EPS 3Y18.6%
EPS 5Y20.08%
EPS Q2Q%1.43%
Revenue 1Y (TTM)0.62%
Revenue growth 3Y9.44%
Revenue growth 5Y7.73%
Sales Q2Q%8.45%
3.2 Future
CWT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.68% yearly.
The Revenue is expected to grow by 4.01% on average over the next years.
EPS Next Y-27.72%
EPS Next 2Y-11.3%
EPS Next 3Y-3.6%
EPS Next 5Y0.68%
Revenue Next Year-2.62%
Revenue Next 2Y2.3%
Revenue Next 3Y3.13%
Revenue Next 5Y4.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.30, which indicates a rather expensive current valuation of CWT.
CWT's Price/Earnings ratio is a bit cheaper when compared to the industry. CWT is cheaper than 64.29% of the companies in the same industry.
CWT is valuated rather cheaply when we compare the Price/Earnings ratio to 26.87, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 18.08, CWT is valued on the expensive side.
71.43% of the companies in the same industry are more expensive than CWT, based on the Price/Forward Earnings ratio.
CWT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.3 | ||
| Fwd PE | 18.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CWT is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.13 |
4.3 Compensation for Growth
A cheap valuation may be justified as CWT's earnings are expected to decrease with -3.60% in the coming years.
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y-11.3%
EPS Next 3Y-3.6%
5. Dividend
5.1 Amount
CWT has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
CWT's Dividend Yield is comparable with the industry average which is at 3.43.
CWT's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
5.2 History
The dividend of CWT is nicely growing with an annual growth rate of 7.26%!
CWT has paid a dividend for at least 10 years, which is a reliable track record.
CWT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of CWT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP52.43%
EPS Next 2Y-11.3%
EPS Next 3Y-3.6%
46.51
+0.14 (+0.3%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryWater Utilities
Earnings (Last)
Earnings (Next)
Inst Owners90.95%
Inst Owner Change-0.86%
Ins Owners0.64%
Ins Owner Change19.24%
Market Cap2.77B
Analysts86.67
Price Target56.51 (21.5%)
Short Float %1.26%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend1.12
Dividend Growth(5Y)7.26%
DP52.43%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)72.91%
Min EPS beat(2)25.08%
Max EPS beat(2)120.74%
EPS beat(4)3
Avg EPS beat(4)52.17%
Min EPS beat(4)-2.57%
Max EPS beat(4)120.74%
EPS beat(8)5
Avg EPS beat(8)42.08%
EPS beat(12)6
Avg EPS beat(12)-960.02%
EPS beat(16)7
Avg EPS beat(16)-726.2%
Revenue beat(2)1
Avg Revenue beat(2)0.75%
Min Revenue beat(2)-6.26%
Max Revenue beat(2)7.75%
Revenue beat(4)3
Avg Revenue beat(4)1.4%
Min Revenue beat(4)-6.26%
Max Revenue beat(4)7.75%
Revenue beat(8)6
Avg Revenue beat(8)5.45%
Revenue beat(12)7
Avg Revenue beat(12)-0.01%
Revenue beat(16)8
Avg Revenue beat(16)-2.22%
PT rev (1m)-2.81%
PT rev (3m)-2.81%
EPS NQ rev (1m)1.06%
EPS NQ rev (3m)5.29%
EPS NY rev (1m)0%
EPS NY rev (3m)0.69%
Revenue NQ rev (1m)1.71%
Revenue NQ rev (3m)6.05%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.3 | ||
| Fwd PE | 18.08 | ||
| P/S | 2.8 | ||
| P/FCF | N/A | ||
| P/OCF | 10.77 | ||
| P/B | 1.67 | ||
| P/tB | 1.71 | ||
| EV/EBITDA | 11.13 |
EPS(TTM)2.41
EY5.18%
EPS(NY)2.57
Fwd EY5.53%
FCF(TTM)-3.84
FCFYN/A
OCF(TTM)4.32
OCFY9.29%
SpS16.63
BVpS27.78
TBVpS27.16
PEG (NY)N/A
PEG (5Y)0.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.52% | ||
| ROE | 8.21% | ||
| ROCE | 4.44% | ||
| ROIC | 3.26% | ||
| ROICexc | 3.29% | ||
| ROICexgc | 3.31% | ||
| OM | 21.11% | ||
| PM (TTM) | 13.71% | ||
| GM | 70.17% | ||
| FCFM | N/A |
ROA(3y)2.35%
ROA(5y)2.54%
ROE(3y)7.53%
ROE(5y)8.34%
ROIC(3y)2.65%
ROIC(5y)2.93%
ROICexc(3y)2.68%
ROICexc(5y)2.97%
ROICexgc(3y)2.71%
ROICexgc(5y)3.01%
ROCE(3y)3.47%
ROCE(5y)3.91%
ROICexcg growth 3Y11.66%
ROICexcg growth 5Y6.46%
ROICexc growth 3Y11.75%
ROICexc growth 5Y6.29%
OM growth 3Y15.39%
OM growth 5Y9.23%
PM growth 3Y12.91%
PM growth 5Y15.82%
GM growth 3Y2.57%
GM growth 5Y1.83%
F-Score5
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.19 | ||
| Cap/Depr | 346.39% | ||
| Cap/Sales | 49.05% | ||
| Interest Coverage | 3.55 | ||
| Cash Conversion | 73.65% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z | 0.86 |
F-Score5
WACC7.73%
ROIC/WACC0.42
Cap/Depr(3y)313.97%
Cap/Depr(5y)300.14%
Cap/Sales(3y)44.14%
Cap/Sales(5y)41.42%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-20.46%
EPS 3Y18.6%
EPS 5Y20.08%
EPS Q2Q%1.43%
EPS Next Y-27.72%
EPS Next 2Y-11.3%
EPS Next 3Y-3.6%
EPS Next 5Y0.68%
Revenue 1Y (TTM)0.62%
Revenue growth 3Y9.44%
Revenue growth 5Y7.73%
Sales Q2Q%8.45%
Revenue Next Year-2.62%
Revenue Next 2Y2.3%
Revenue Next 3Y3.13%
Revenue Next 5Y4.01%
EBIT growth 1Y10.29%
EBIT growth 3Y26.29%
EBIT growth 5Y17.67%
EBIT Next Year51.52%
EBIT Next 3Y24.08%
EBIT Next 5Y18.3%
FCF growth 1Y-35.29%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y34.44%
OCF growth 3Y7.87%
OCF growth 5Y11.5%