SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
NYSE:SWX - New York Stock Exchange, Inc. - US8448951025 - Common Stock - Currency: USD
SWX gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 14 industry peers in the Gas Utilities industry. Both the profitability and financial health of SWX have multiple concerns. SWX is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
SWX had positive earnings in the past year.
In the past year SWX had a positive cash flow from operations.
Of the past 5 years SWX 4 years were profitable.
Each year in the past 5 years SWX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SWX (1.59%) is worse than 85.71% of its industry peers.
SWX's Return On Equity of 5.27% is on the low side compared to the rest of the industry. SWX is outperformed by 85.71% of its industry peers.
SWX has a worse Return On Invested Capital (3.98%) than 85.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SWX is below the industry average of 6.38%.
The last Return On Invested Capital (3.98%) for SWX is above the 3 year average (3.49%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.59% | ||
| ROE | 5.27% | ||
| ROIC | 3.98% |
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
SWX has a Profit Margin of 4.06%. This is in the lower half of the industry: SWX underperforms 78.57% of its industry peers.
SWX's Profit Margin has declined in the last couple of years.
SWX's Operating Margin of 11.29% is on the low side compared to the rest of the industry. SWX is outperformed by 85.71% of its industry peers.
SWX's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 86.06%, SWX belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
SWX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.29% | ||
| PM (TTM) | 4.06% | ||
| GM | 86.06% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWX is destroying value.
The number of shares outstanding for SWX has been increased compared to 1 year ago.
The number of shares outstanding for SWX has been increased compared to 5 years ago.
Compared to 1 year ago, SWX has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.01, we must say that SWX is in the distress zone and has some risk of bankruptcy.
SWX has a Altman-Z score of 1.01. This is comparable to the rest of the industry: SWX outperforms 42.86% of its industry peers.
SWX has a debt to FCF ratio of 333.07. This is a negative value and a sign of low solvency as SWX would need 333.07 years to pay back of all of its debts.
SWX's Debt to FCF ratio of 333.07 is in line compared to the rest of the industry. SWX outperforms 50.00% of its industry peers.
SWX has a Debt/Equity ratio of 1.27. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.27, SWX perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 333.07 | ||
| Altman-Z | 1.01 |
ROIC/WACC0.59
WACC6.72%
2.3 Liquidity
SWX has a Current Ratio of 1.01. This is a normal value and indicates that SWX is financially healthy and should not expect problems in meeting its short term obligations.
With an excellent Current ratio value of 1.01, SWX belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
A Quick Ratio of 0.94 indicates that SWX may have some problems paying its short term obligations.
SWX has a Quick ratio of 0.94. This is amongst the best in the industry. SWX outperforms 92.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.77% over the past year.
Measured over the past years, SWX shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.36% on average per year.
Looking at the last year, SWX shows a very negative growth in Revenue. The Revenue has decreased by -10.07% in the last year.
SWX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.38% yearly.
EPS 1Y (TTM)25.77%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%70.97%
Revenue 1Y (TTM)-10.07%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%119.64%
3.2 Future
SWX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.85% yearly.
SWX is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -10.55% yearly.
EPS Next Y17.68%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
EPS Next 5Y8.85%
Revenue Next Year-1.69%
Revenue Next 2Y1.09%
Revenue Next 3Y-4.48%
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.
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
Based on the Price/Earnings ratio of 20.92, the valuation of SWX can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SWX indicates a slightly more expensive valuation: SWX is more expensive than 71.43% of the companies listed in the same industry.
SWX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.76.
With a Price/Forward Earnings ratio of 18.29, SWX is valued on the expensive side.
Based on the Price/Forward Earnings ratio, SWX is valued a bit more expensive than 71.43% of the companies in the same industry.
SWX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.91.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 18.29 |
4.2 Price Multiples
SWX's Enterprise Value to EBITDA is on the same level as the industry average.
SWX's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 391.45 | ||
| EV/EBITDA | 9.63 |
4.3 Compensation for Growth
SWX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as SWX's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)1.18
PEG (5Y)N/A
EPS Next 2Y15.1%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
SWX has a Yearly Dividend Yield of 3.12%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.95, SWX is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.36, SWX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
5.2 History
The dividend of SWX has a limited annual growth rate of 2.90%.
SWX has been paying a dividend for at least 10 years, so it has a reliable track record.
SWX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)2.9%
Div Incr Years0
Div Non Decr Years32
5.3 Sustainability
91.92% of the earnings are spent on dividend by SWX. This is not a sustainable payout ratio.
The dividend of SWX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP91.92%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
76.57
+0.18 (+0.24%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners92.6%
Inst Owner Change2.33%
Ins Owners0.45%
Ins Owner Change6.72%
Market Cap5.51B
Analysts76.67
Price Target81.94 (7.01%)
Short Float %2%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
Yearly Dividend2.48
Dividend Growth(5Y)2.9%
DP91.92%
Div Incr Years0
Div Non Decr Years32
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.63%
Min EPS beat(2)8.85%
Max EPS beat(2)20.4%
EPS beat(4)3
Avg EPS beat(4)0.15%
Min EPS beat(4)-40.99%
Max EPS beat(4)20.4%
EPS beat(8)5
Avg EPS beat(8)12.19%
EPS beat(12)7
Avg EPS beat(12)8.55%
EPS beat(16)7
Avg EPS beat(16)-4.11%
Revenue beat(2)0
Avg Revenue beat(2)-9.75%
Min Revenue beat(2)-14.2%
Max Revenue beat(2)-5.29%
Revenue beat(4)0
Avg Revenue beat(4)-7.5%
Min Revenue beat(4)-14.2%
Max Revenue beat(4)-3.9%
Revenue beat(8)3
Avg Revenue beat(8)-7.84%
Revenue beat(12)7
Avg Revenue beat(12)-0.49%
Revenue beat(16)11
Avg Revenue beat(16)1.53%
PT rev (1m)2.12%
PT rev (3m)2.55%
EPS NQ rev (1m)-8.88%
EPS NQ rev (3m)10254.5%
EPS NY rev (1m)0%
EPS NY rev (3m)0.14%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)1.92%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 18.29 | ||
| P/S | 1.16 | ||
| P/FCF | 391.45 | ||
| P/OCF | 5.96 | ||
| P/B | 1.5 | ||
| P/tB | 1.91 | ||
| EV/EBITDA | 9.63 |
EPS(TTM)3.66
EY4.78%
EPS(NY)4.19
Fwd EY5.47%
FCF(TTM)0.2
FCFY0.26%
OCF(TTM)12.84
OCFY16.77%
SpS66.28
BVpS51.1
TBVpS40.16
PEG (NY)1.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.59% | ||
| ROE | 5.27% | ||
| ROCE | 4.98% | ||
| ROIC | 3.98% | ||
| ROICexc | 4.12% | ||
| ROICexgc | 4.44% | ||
| OM | 11.29% | ||
| PM (TTM) | 4.06% | ||
| GM | 86.06% | ||
| FCFM | 0.3% |
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 Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.27 | ||
| Debt/FCF | 333.07 | ||
| Debt/EBITDA | 4.69 | ||
| Cap/Depr | 200.1% | ||
| Cap/Sales | 19.07% | ||
| Interest Coverage | 1.94 | ||
| Cash Conversion | 93% | ||
| Profit Quality | 7.26% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.01 |
F-Score6
WACC6.72%
ROIC/WACC0.59
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)25.77%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%70.97%
EPS Next Y17.68%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
EPS Next 5Y8.85%
Revenue 1Y (TTM)-10.07%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%119.64%
Revenue Next Year-1.69%
Revenue Next 2Y1.09%
Revenue Next 3Y-4.48%
Revenue Next 5Y-10.55%
EBIT growth 1Y22.42%
EBIT growth 3Y9.39%
EBIT growth 5Y5.41%
EBIT Next Year116.53%
EBIT Next 3Y31.56%
EBIT Next 5Y16.69%
FCF growth 1Y101.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y491.63%
OCF growth 3Y130.03%
OCF growth 5Y22.06%