SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
NYSE:SWX - New York Stock Exchange, Inc. - US8448951025 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to SWX. SWX was compared to 86 industry peers in the Gas Utilities industry. SWX has a bad profitability rating. Also its financial health evaluation is rather negative. While showing a medium growth rate, SWX is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
SWX had positive earnings in the past year.
SWX had a positive operating cash flow in the past year.
SWX had positive earnings in 4 of the past 5 years.
SWX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SWX has a worse Return On Assets (1.86%) than 71.43% of its industry peers.
SWX's Return On Equity of 6.29% is on the low side compared to the rest of the industry. SWX is outperformed by 78.57% of its industry peers.
SWX's Return On Invested Capital of 3.93% is on the low side compared to the rest of the industry. SWX is outperformed by 85.71% of its industry peers.
SWX had an Average Return On Invested Capital over the past 3 years of 3.49%. This is significantly below the industry average of 12.61%.
The last Return On Invested Capital (3.93%) for SWX is above the 3 year average (3.49%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.86% | ||
| ROE | 6.29% | ||
| ROIC | 3.93% |
ROA(3y)0.46%
ROA(5y)1.12%
ROE(3y)1.2%
ROE(5y)3.81%
ROIC(3y)3.49%
ROIC(5y)3.49%
1.3 Margins
The Profit Margin of SWX (4.66%) is worse than 71.43% of its industry peers.
In the last couple of years the Profit Margin of SWX has declined.
With a Operating Margin value of 10.90%, SWX is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
SWX's Operating Margin has declined in the last couple of years.
The Gross Margin of SWX (83.33%) is better than 92.86% of its industry peers.
SWX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.9% | ||
| PM (TTM) | 4.66% | ||
| GM | 83.33% |
OM growth 3Y-1.96%
OM growth 5Y-4.51%
PM growth 3Y-10.67%
PM growth 5Y-10.72%
GM growth 3Y-4.25%
GM growth 5Y-2.43%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SWX is destroying value.
SWX has more shares outstanding than it did 1 year ago.
SWX has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SWX has been reduced compared to a year ago.
2.2 Solvency
SWX has an Altman-Z score of 0.97. This is a bad value and indicates that SWX is not financially healthy and even has some risk of bankruptcy.
SWX has a Altman-Z score (0.97) which is comparable to the rest of the industry.
SWX has a debt to FCF ratio of 26.41. This is a negative value and a sign of low solvency as SWX would need 26.41 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 26.41, SWX is doing good in the industry, outperforming 71.43% of the companies in the same industry.
SWX has a Debt/Equity ratio of 1.40. This is a high value indicating a heavy dependency on external financing.
SWX has a worse Debt to Equity ratio (1.40) than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 26.41 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.48
WACC8.22%
2.3 Liquidity
A Current Ratio of 0.79 indicates that SWX may have some problems paying its short term obligations.
The Current ratio of SWX (0.79) is comparable to the rest of the industry.
SWX has a Quick Ratio of 0.79. This is a bad value and indicates that SWX is not financially healthy enough and could expect problems in meeting its short term obligations.
SWX has a better Quick ratio (0.79) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
SWX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.05%, which is quite good.
SWX shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.36% yearly.
Looking at the last year, SWX shows a very negative growth in Revenue. The Revenue has decreased by -10.78% in the last year.
Measured over the past years, SWX shows a quite strong growth in Revenue. The Revenue has been growing by 10.38% on average per year.
EPS 1Y (TTM)12.05%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%20.44%
Revenue 1Y (TTM)-10.78%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-17.99%
3.2 Future
The Earnings Per Share is expected to grow by 9.30% on average over the next years. This is quite good.
Based on estimates for the next years, SWX will show a very negative growth in Revenue. The Revenue will decrease by -10.55% on average per year.
EPS Next Y17.52%
EPS Next 2Y14.6%
EPS Next 3Y12.55%
EPS Next 5Y9.3%
Revenue Next Year-1.69%
Revenue Next 2Y1.09%
Revenue Next 3Y-7.86%
Revenue Next 5Y-10.55%
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 accelerating.
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
SWX is valuated rather expensively with a Price/Earnings ratio of 21.03.
SWX's Price/Earnings ratio is a bit more expensive when compared to the industry. SWX is more expensive than 71.43% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.57, SWX is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 17.43, the valuation of SWX can be described as rather expensive.
Based on the Price/Forward Earnings ratio, SWX is valued a bit more expensive than the industry average as 71.43% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of SWX to the average of the S&P500 Index (22.41), we can say SWX is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 17.43 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SWX.
Based on the Price/Free Cash Flow ratio, SWX is valued a bit cheaper than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.21 | ||
| EV/EBITDA | 9.4 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SWX's earnings are expected to grow with 12.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.2
PEG (5Y)N/A
EPS Next 2Y14.6%
EPS Next 3Y12.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.42%, SWX has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.01, SWX is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.40, SWX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
5.2 History
The dividend of SWX has a limited annual growth rate of 2.90%.
SWX has paid a dividend for at least 10 years, which is a reliable track record.
SWX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.9%
Div Incr Years0
Div Non Decr Years32
5.3 Sustainability
SWX pays out 79.09% of its income as dividend. This is not a sustainable payout ratio.
The dividend of SWX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP79.09%
EPS Next 2Y14.6%
EPS Next 3Y12.55%
72.33
+0.71 (+0.99%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners91.89%
Inst Owner Change-0.37%
Ins Owners0.45%
Ins Owner Change5.93%
Market Cap5.20B
Analysts76.67
Price Target79.56 (10%)
Short Float %2.45%
Short Ratio3.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend2.48
Dividend Growth(5Y)2.9%
DP79.09%
Div Incr Years0
Div Non Decr Years32
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.59%
Min EPS beat(2)8.85%
Max EPS beat(2)12.33%
EPS beat(4)2
Avg EPS beat(4)-14.11%
Min EPS beat(4)-40.99%
Max EPS beat(4)12.33%
EPS beat(8)5
Avg EPS beat(8)26.28%
EPS beat(12)6
Avg EPS beat(12)1.92%
EPS beat(16)6
Avg EPS beat(16)-5.65%
Revenue beat(2)0
Avg Revenue beat(2)-10.4%
Min Revenue beat(2)-14.2%
Max Revenue beat(2)-6.61%
Revenue beat(4)0
Avg Revenue beat(4)-20.63%
Min Revenue beat(4)-57.81%
Max Revenue beat(4)-3.9%
Revenue beat(8)4
Avg Revenue beat(8)-5.19%
Revenue beat(12)8
Avg Revenue beat(12)0.75%
Revenue beat(16)12
Avg Revenue beat(16)2.12%
PT rev (1m)-0.43%
PT rev (3m)0%
EPS NQ rev (1m)1.27%
EPS NQ rev (3m)-4.8%
EPS NY rev (1m)0%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)1.54%
Revenue NQ rev (3m)1.98%
Revenue NY rev (1m)-1.37%
Revenue NY rev (3m)-3.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.03 | ||
| Fwd PE | 17.43 | ||
| P/S | 1.08 | ||
| P/FCF | 27.21 | ||
| P/OCF | 4.71 | ||
| P/B | 1.45 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 9.4 |
EPS(TTM)3.44
EY4.76%
EPS(NY)4.15
Fwd EY5.74%
FCF(TTM)2.66
FCFY3.67%
OCF(TTM)15.34
OCFY21.21%
SpS67.14
BVpS49.77
TBVpS38.9
PEG (NY)1.2
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.86% | ||
| ROE | 6.29% | ||
| ROCE | 5.12% | ||
| ROIC | 3.93% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 4.41% | ||
| OM | 10.9% | ||
| PM (TTM) | 4.66% | ||
| GM | 83.33% | ||
| FCFM | 3.96% |
ROA(3y)0.46%
ROA(5y)1.12%
ROE(3y)1.2%
ROE(5y)3.81%
ROIC(3y)3.49%
ROIC(5y)3.49%
ROICexc(3y)3.55%
ROICexc(5y)3.57%
ROICexgc(3y)3.98%
ROICexgc(5y)4.01%
ROCE(3y)4.65%
ROCE(5y)4.64%
ROICexcg growth 3Y8.4%
ROICexcg growth 5Y-1.3%
ROICexc growth 3Y12.21%
ROICexc growth 5Y-2.13%
OM growth 3Y-1.96%
OM growth 5Y-4.51%
PM growth 3Y-10.67%
PM growth 5Y-10.72%
GM growth 3Y-4.25%
GM growth 5Y-2.43%
F-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 26.41 | ||
| Debt/EBITDA | 5.16 | ||
| Cap/Depr | 203.98% | ||
| Cap/Sales | 18.89% | ||
| Interest Coverage | 1.86 | ||
| Cash Conversion | 113.36% | ||
| Profit Quality | 84.96% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 0.97 |
F-Score6
WACC8.22%
ROIC/WACC0.48
Cap/Depr(3y)198.77%
Cap/Depr(5y)207.54%
Cap/Sales(3y)17.3%
Cap/Sales(5y)19.27%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.05%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%20.44%
EPS Next Y17.52%
EPS Next 2Y14.6%
EPS Next 3Y12.55%
EPS Next 5Y9.3%
Revenue 1Y (TTM)-10.78%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-17.99%
Revenue Next Year-1.69%
Revenue Next 2Y1.09%
Revenue Next 3Y-7.86%
Revenue Next 5Y-10.55%
EBIT growth 1Y19.22%
EBIT growth 3Y9.39%
EBIT growth 5Y5.41%
EBIT Next Year119.37%
EBIT Next 3Y31.56%
EBIT Next 5Y16.69%
FCF growth 1Y121.7%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3043.59%
OCF growth 3Y130.03%
OCF growth 5Y22.06%