SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SWX - US8448951025 - Common Stock
83.02 USD
-0.88 (-1.05%)
83.02 USD
0 (0%)
Taking everything into account, SWX scores 4 out of 10 in our fundamental rating. SWX was compared to 14 industry peers in the Gas Utilities industry. SWX has an average financial health and profitability rating. SWX is quite expensive at the moment. It does show a decent growth rate. SWX also has an excellent dividend rating.
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.
- In the past 5 years SWX always reported a positive cash flow from operatings.
1.2 Ratios
- SWX's Return On Assets of 4.49% is fine compared to the rest of the industry. SWX outperforms 78.57% of its industry peers.
- With a decent Return On Equity value of 11.81%, SWX is doing good in the industry, outperforming 64.29% of the companies in the same industry.
- SWX has a Return On Invested Capital of 4.42%. This is in the lower half of the industry: SWX underperforms 71.43% of its industry peers.
- SWX had an Average Return On Invested Capital over the past 3 years of 3.49%. This is below the industry average of 6.27%.
- The last Return On Invested Capital (4.42%) for SWX is above the 3 year average (3.49%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.49% | ||
| ROE | 11.81% | ||
| ROIC | 4.42% |
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 (11.59%) is better than 64.29% of its industry peers.
- SWX's Profit Margin has declined in the last couple of years.
- SWX has a worse Operating Margin (12.83%) than 85.71% of its industry peers.
- In the last couple of years the Operating Margin of SWX has declined.
- SWX has a Gross Margin of 85.13%. This is amongst the best in the industry. SWX outperforms 92.86% of its industry peers.
- SWX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.83% | ||
| PM (TTM) | 11.59% | ||
| GM | 85.13% |
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%
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.
- Compared to 1 year ago, SWX has an improved debt to assets ratio.
2.2 Solvency
- SWX has an Altman-Z score of 1.31. This is a bad value and indicates that SWX is not financially healthy and even has some risk of bankruptcy.
- SWX's Altman-Z score of 1.31 is fine compared to the rest of the industry. SWX outperforms 71.43% of its industry peers.
- A Debt/Equity ratio of 0.89 indicates that SWX is somewhat dependend on debt financing.
- The Debt to Equity ratio of SWX (0.89) is better than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.31 |
ROIC/WACC0.65
WACC6.79%
2.3 Liquidity
- A Current Ratio of 1.55 indicates that SWX should not have too much problems paying its short term obligations.
- SWX has a better Current ratio (1.55) than 100.00% of its industry peers.
- A Quick Ratio of 1.43 indicates that SWX should not have too much problems paying its short term obligations.
- SWX's Quick ratio of 1.43 is amongst the best of the industry. SWX outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
- SWX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.17%, which is quite impressive.
- The Earnings Per Share has been decreasing by -4.36% on average over the past years.
- The Revenue for SWX has decreased by -23.15% in the past year. This is quite bad
- The Revenue has been growing by 10.38% on average over the past years. This is quite good.
EPS 1Y (TTM)25.17%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%-33.33%
Revenue 1Y (TTM)-23.15%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-70.63%
3.2 Future
- The Earnings Per Share is expected to grow by 15.21% on average over the next years. This is quite good.
- Based on estimates for the next years, SWX will show a decrease in Revenue. The Revenue will decrease by -9.97% on average per year.
EPS Next Y15.95%
EPS Next 2Y14.97%
EPS Next 3Y16.1%
EPS Next 5Y15.21%
Revenue Next Year-21.43%
Revenue Next 2Y-25.94%
Revenue Next 3Y-13.47%
Revenue Next 5Y-9.97%
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
- Based on the Price/Earnings ratio of 22.87, the valuation of SWX can be described as rather expensive.
- SWX's Price/Earnings ratio is a bit more expensive when compared to the industry. SWX is more expensive than 78.57% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, SWX is valued at the same level.
- SWX is valuated rather expensively with a Price/Forward Earnings ratio of 19.88.
- Based on the Price/Forward Earnings ratio, SWX is valued expensively inside the industry as 85.71% of the companies are valued cheaper.
- SWX is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.87 | ||
| Fwd PE | 19.88 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as SWX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.08 |
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 16.10% in the coming years.
PEG (NY)1.43
PEG (5Y)N/A
EPS Next 2Y14.97%
EPS Next 3Y16.1%
5. Dividend
5.1 Amount
- SWX has a Yearly Dividend Yield of 2.96%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 3.79, SWX is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.81, SWX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
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 38.44% of its income as dividend. This is a sustainable payout ratio.
- The dividend of SWX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.44%
EPS Next 2Y14.97%
EPS Next 3Y16.1%
SOUTHWEST GAS HOLDINGS INC / SWX FAQ
What is the ChartMill fundamental rating of SOUTHWEST GAS HOLDINGS INC (SWX) stock?
ChartMill assigns a fundamental rating of 4 / 10 to SWX.
What is the valuation status for SWX stock?
ChartMill assigns a valuation rating of 1 / 10 to SOUTHWEST GAS HOLDINGS INC (SWX). This can be considered as Overvalued.
What is the profitability of SWX stock?
SOUTHWEST GAS HOLDINGS INC (SWX) has a profitability rating of 5 / 10.
What is the financial health of SOUTHWEST GAS HOLDINGS INC (SWX) stock?
The financial health rating of SOUTHWEST GAS HOLDINGS INC (SWX) is 4 / 10.
Is the dividend of SOUTHWEST GAS HOLDINGS INC sustainable?
The dividend rating of SOUTHWEST GAS HOLDINGS INC (SWX) is 7 / 10 and the dividend payout ratio is 38.44%.