Taking everything into account, SBS scores 6 out of 10 in our fundamental rating. SBS was compared to 14 industry peers in the Water Utilities industry. SBS has an excellent profitability rating, but there are some minor concerns on its financial health. SBS is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SBS had positive earnings in the past year.
SBS had a positive operating cash flow in the past year.
In the past 5 years SBS has always been profitable.
In the past 5 years SBS always reported a positive cash flow from operatings.

1.2 Ratios

SBS has a better Return On Assets (12.58%) than 100.00% of its industry peers.
SBS has a Return On Equity of 27.61%. This is amongst the best in the industry. SBS outperforms 100.00% of its industry peers.
The Return On Invested Capital of SBS (16.40%) is better than 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SBS is significantly above the industry average of 4.99%.
The last Return On Invested Capital (16.40%) for SBS is above the 3 year average (10.46%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	12.58%
ROE	27.61%
ROIC	16.4%

ROA(3y)7.67%

ROA(5y)5.86%

ROE(3y)16.39%

ROE(5y)12.54%

ROIC(3y)10.46%

ROIC(5y)8.95%

1.3 Margins

With an excellent Profit Margin value of 27.76%, SBS belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
In the last couple of years the Profit Margin of SBS has grown nicely.
The Operating Margin of SBS (44.20%) is better than 100.00% of its industry peers.
In the last couple of years the Operating Margin of SBS has grown nicely.
SBS has a Gross Margin of 52.84%. This is comparable to the rest of the industry: SBS outperforms 57.14% of its industry peers.
In the last couple of years the Gross Margin of SBS has grown nicely.

		Industry Rank	Sector Rank
OM	44.2%
PM (TTM)	27.76%
GM	52.84%

OM growth 3Y26.98%

OM growth 5Y6.17%

PM growth 3Y30.85%

PM growth 5Y7.19%

GM growth 3Y16.63%

GM growth 5Y4.49%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SBS is still creating some value.
SBS has about the same amout of shares outstanding than it did 1 year ago.
SBS has about the same amout of shares outstanding than it did 5 years ago.
SBS has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.74 indicates that SBS is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.74, SBS belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
A Debt/Equity ratio of 0.69 indicates that SBS is somewhat dependend on debt financing.
SBS has a Debt to Equity ratio of 0.69. This is amongst the best in the industry. SBS outperforms 85.71% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.69
Debt/FCF	N/A
Altman-Z	2.74

ROIC/WACC1.24

WACC13.22%

2.3 Liquidity

SBS has a Current Ratio of 1.26. This is a normal value and indicates that SBS is financially healthy and should not expect problems in meeting its short term obligations.
SBS has a Current ratio of 1.26. This is in the better half of the industry: SBS outperforms 78.57% of its industry peers.
A Quick Ratio of 1.26 indicates that SBS should not have too much problems paying its short term obligations.
SBS has a better Quick ratio (1.26) than 85.71% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.26
Quick Ratio	1.26

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for SBS have decreased strongly by -22.72% in the last year.
The Earnings Per Share has been growing by 23.08% on average over the past years. This is a very strong growth
The Revenue has grown by 41.35% in the past year. This is a very strong growth!
SBS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.98% yearly.

EPS 1Y (TTM)-22.72%

EPS 3Y60.79%

EPS 5Y23.08%

EPS Q2Q%-64.65%

Revenue 1Y (TTM)41.35%

Revenue growth 3Y22.86%

Revenue growth 5Y14.98%

Sales Q2Q%-37.15%

3.2 Future

SBS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.85% yearly.
Based on estimates for the next years, SBS will show a small growth in Revenue. The Revenue will grow by 5.59% on average per year.

EPS Next Y-27.07%

EPS Next 2Y-10.46%

EPS Next 3Y0.85%

EPS Next 5YN/A

Revenue Next Year-19.33%

Revenue Next 2Y-4.07%

Revenue Next 3Y1.7%

Revenue Next 5Y5.59%

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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 14.35, SBS is valued correctly.
Based on the Price/Earnings ratio, SBS is valued cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.60. SBS is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 13.45 indicates a correct valuation of SBS.
100.00% of the companies in the same industry are more expensive than SBS, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 25.83. SBS is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	14.35
Fwd PE	13.45

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SBS is valued cheaper than 100.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	5.98

4.3 Compensation for Growth

The excellent profitability rating of SBS may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)0.62

EPS Next 2Y-10.46%

EPS Next 3Y0.85%

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5. Dividend

5.1 Amount

SBS has a yearly dividend return of 0.78%, which is pretty low.
SBS's Dividend Yield is slightly below the industry average, which is at 2.93.
Compared to an average S&P500 Dividend Yield of 1.82, SBS's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.78%

5.2 History

The dividend of SBS has a limited annual growth rate of 4.65%.
SBS has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of SBS decreased recently.

Dividend Growth(5Y)4.65%

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

SBS pays out 21.17% of its income as dividend. This is a sustainable payout ratio.
SBS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.

DP21.17%

EPS Next 2Y-10.46%

EPS Next 3Y0.85%

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CIA SANEAMENTO BASICO DE-ADR / SBS FAQ

Can you provide the ChartMill fundamental rating for CIA SANEAMENTO BASICO DE-ADR?

ChartMill assigns a fundamental rating of 6 / 10 to SBS.

What is the valuation status for SBS stock?

ChartMill assigns a valuation rating of 5 / 10 to CIA SANEAMENTO BASICO DE-ADR (SBS). This can be considered as Fairly Valued.

How profitable is CIA SANEAMENTO BASICO DE-ADR (SBS) stock?

CIA SANEAMENTO BASICO DE-ADR (SBS) has a profitability rating of 9 / 10.

Can you provide the financial health for SBS stock?

The financial health rating of CIA SANEAMENTO BASICO DE-ADR (SBS) is 5 / 10.

Can you provide the expected EPS growth for SBS stock?

The Earnings per Share (EPS) of CIA SANEAMENTO BASICO DE-ADR (SBS) is expected to decline by -27.07% in the next year.