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 4 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 has a correct valuation and a medium growth rate.
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.
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
SWX's Return On Assets of 1.65% is on the low side compared to the rest of the industry. SWX is outperformed by 78.57% of its industry peers.
With a Return On Equity value of 5.67%, SWX is not doing good in the industry: 78.57% of the companies in the same industry are doing better.
Looking at the Return On Invested Capital, with a value of 3.64%, SWX is doing worse than 85.71% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SWX is below the industry average of 6.56%.
The 3 year average ROIC (3.49%) for SWX is below the current ROIC(3.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.65% | ||
| ROE | 5.67% | ||
| ROIC | 3.64% |
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
With a Profit Margin value of 3.89%, SWX is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
SWX's Profit Margin has declined in the last couple of years.
SWX has a Operating Margin of 9.46%. This is amonst the worse of the industry: SWX underperforms 85.71% of its industry peers.
In the last couple of years the Operating Margin of SWX has declined.
SWX's Gross Margin of 77.51% is fine compared to the rest of the industry. SWX outperforms 71.43% of its industry peers.
SWX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.46% | ||
| PM (TTM) | 3.89% | ||
| GM | 77.51% |
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.
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
Based on the Altman-Z score of 0.97, we must say that SWX is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.97, SWX is in line with its industry, outperforming 42.86% of the companies in the same industry.
SWX has a debt to FCF ratio of 12.34. This is a negative value and a sign of low solvency as SWX would need 12.34 years to pay back of all of its debts.
SWX's Debt to FCF ratio of 12.34 is amongst the best of the industry. SWX outperforms 85.71% of its industry peers.
SWX has a Debt/Equity ratio of 1.43. This is a high value indicating a heavy dependency on external financing.
SWX has a worse Debt to Equity ratio (1.43) than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.43 | ||
| Debt/FCF | 12.34 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.54
WACC6.72%
2.3 Liquidity
SWX has a Current Ratio of 0.80. 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 Current ratio of 0.80. This is comparable to the rest of the industry: SWX outperforms 57.14% of its industry peers.
A Quick Ratio of 0.80 indicates that SWX may have some problems paying its short term obligations.
SWX has a Quick ratio of 0.80. This is in the better half of the industry: SWX outperforms 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.05% over the past year.
The Earnings Per Share has been decreasing by -4.36% on average over the past years.
The Revenue has decreased by -5.92% in the past 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)12.05%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%20.44%
Revenue 1Y (TTM)-5.92%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-17.99%
3.2 Future
Based on estimates for the next years, SWX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.78% on average per year.
SWX is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -10.42% yearly.
EPS Next Y17.52%
EPS Next 2Y14.6%
EPS Next 3Y12.55%
EPS Next 5Y8.78%
Revenue Next Year-0.32%
Revenue Next 2Y1.5%
Revenue Next 3Y-7.86%
Revenue Next 5Y-10.42%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 20.66 indicates a rather expensive valuation of SWX.
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.
SWX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.60.
The Price/Forward Earnings ratio is 17.12, which indicates a rather expensive current valuation of SWX.
SWX's Price/Forward 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.
SWX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.66 | ||
| Fwd PE | 17.12 |
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 cheaply inside the industry as 85.71% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.46 | ||
| EV/EBITDA | 9.91 |
4.3 Compensation for Growth
The 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 12.55% in the coming years.
PEG (NY)1.18
PEG (5Y)N/A
EPS Next 2Y14.6%
EPS Next 3Y12.55%
5. Dividend
5.1 Amount
SWX has a Yearly Dividend Yield of 3.59%.
SWX's Dividend Yield is slightly below the industry average, which is at 3.96.
SWX's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.59% |
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 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 Years17
Div Non Decr Years32
5.3 Sustainability
SWX pays out 89.41% 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.
DP89.41%
EPS Next 2Y14.6%
EPS Next 3Y12.55%
71.06
-0.29 (-0.41%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners92.87%
Inst Owner Change-0.48%
Ins Owners0.44%
Ins Owner Change5.93%
Market Cap5.11B
Analysts75
Price Target79.9 (12.44%)
Short Float %1.93%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.59% |
Yearly Dividend2.48
Dividend Growth(5Y)2.9%
DP89.41%
Div Incr Years17
Div Non Decr Years32
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-14.33%
Min EPS beat(2)-40.99%
Max EPS beat(2)12.33%
EPS beat(4)1
Avg EPS beat(4)-17.42%
Min EPS beat(4)-40.99%
Max EPS beat(4)12.33%
EPS beat(8)5
Avg EPS beat(8)27.4%
EPS beat(12)5
Avg EPS beat(12)-0.44%
EPS beat(16)6
Avg EPS beat(16)-5.92%
Revenue beat(2)0
Avg Revenue beat(2)-5.25%
Min Revenue beat(2)-6.61%
Max Revenue beat(2)-3.9%
Revenue beat(4)1
Avg Revenue beat(4)-13.75%
Min Revenue beat(4)-57.81%
Max Revenue beat(4)13.33%
Revenue beat(8)5
Avg Revenue beat(8)-1.08%
Revenue beat(12)9
Avg Revenue beat(12)2.73%
Revenue beat(16)12
Avg Revenue beat(16)2.49%
PT rev (1m)0.43%
PT rev (3m)0.43%
EPS NQ rev (1m)0.4%
EPS NQ rev (3m)-5.61%
EPS NY rev (1m)1.26%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.42%
Revenue NY rev (1m)2.69%
Revenue NY rev (3m)-2.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.66 | ||
| Fwd PE | 17.12 | ||
| P/S | 1 | ||
| P/FCF | 12.46 | ||
| P/OCF | 3.77 | ||
| P/B | 1.46 | ||
| P/tB | 1.88 | ||
| EV/EBITDA | 9.91 |
EPS(TTM)3.44
EY4.84%
EPS(NY)4.15
Fwd EY5.84%
FCF(TTM)5.7
FCFY8.03%
OCF(TTM)18.87
OCFY26.55%
SpS71.15
BVpS48.77
TBVpS37.9
PEG (NY)1.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.65% | ||
| ROE | 5.67% | ||
| ROCE | 4.75% | ||
| ROIC | 3.64% | ||
| ROICexc | 3.77% | ||
| ROICexgc | 4.07% | ||
| OM | 9.46% | ||
| PM (TTM) | 3.89% | ||
| GM | 77.51% | ||
| FCFM | 8.02% |
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 Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.43 | ||
| Debt/FCF | 12.34 | ||
| Debt/EBITDA | 5.45 | ||
| Cap/Depr | 215.75% | ||
| Cap/Sales | 18.5% | ||
| Interest Coverage | 1.73 | ||
| Cash Conversion | 147.01% | ||
| Profit Quality | 206.15% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 0.97 |
F-Score6
WACC6.72%
ROIC/WACC0.54
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 5Y8.78%
Revenue 1Y (TTM)-5.92%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-17.99%
Revenue Next Year-0.32%
Revenue Next 2Y1.5%
Revenue Next 3Y-7.86%
Revenue Next 5Y-10.42%
EBIT growth 1Y-1.18%
EBIT growth 3Y9.39%
EBIT growth 5Y5.41%
EBIT Next Year111.86%
EBIT Next 3Y30.09%
EBIT Next 5Y16.69%
FCF growth 1Y220.72%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y154.36%
OCF growth 3Y130.03%
OCF growth 5Y22.06%