SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SWX - US8448951025 - Common Stock
83.46 USD
+0.44 (+0.53%)
83.46 USD
0 (0%)
Overall SWX gets a fundamental rating of 4 out of 10. We evaluated SWX against 14 industry peers in the Gas Utilities industry. Both the profitability and the financial health of SWX get a neutral evaluation. Nothing too spectacular is happening here. While showing a medium growth rate, SWX is valued expensive at the moment. 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.
- Of the past 5 years SWX 4 years were profitable.
- SWX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 4.49%, SWX is doing good in the industry, outperforming 78.57% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 11.81%, SWX is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
- SWX's Return On Invested Capital of 4.42% is on the low side compared to the rest of the industry. SWX is outperformed by 71.43% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SWX is below the industry average of 6.27%.
- The 3 year average ROIC (3.49%) for SWX is below the current ROIC(4.42%), indicating increased profibility in the last year.
| 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
- Looking at the Profit Margin, with a value of 11.59%, SWX is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
- 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.
- SWX's Operating Margin has declined in the last couple of years.
- With an excellent Gross Margin value of 85.13%, SWX belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
- In the last couple of years the Gross Margin of SWX has declined.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWX is destroying value.
- SWX has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for SWX has been increased compared to 5 years ago.
- SWX has a better debt/assets ratio than last year.
2.2 Solvency
- SWX has an Altman-Z score of 1.30. This is a bad value and indicates that SWX is not financially healthy and even has some risk of bankruptcy.
- SWX has a better Altman-Z score (1.30) than 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 | 1.3 |
ROIC/WACC0.65
WACC6.8%
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 Current ratio of 1.55. This is amongst the best in the industry. SWX outperforms 100.00% of its industry peers.
- SWX has a Quick Ratio of 1.43. This is a normal value and indicates that SWX is financially healthy and should not expect problems in meeting its short term obligations.
- SWX has a Quick ratio of 1.43. This is amongst the best in 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
- The Earnings Per Share has grown by an impressive 25.17% over the past year.
- The Earnings Per Share has been decreasing by -4.36% on average over the past years.
- Looking at the last year, SWX shows a very negative growth in Revenue. The Revenue has decreased by -23.15% 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)25.17%
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
- Based on estimates for the next years, SWX will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.21% on average per year.
- The Revenue is expected to decrease by -9.97% on average over the next years.
EPS Next Y16.03%
EPS Next 2Y15.05%
EPS Next 3Y16.1%
EPS Next 5Y15.21%
Revenue Next Year-30.6%
Revenue Next 2Y-33.63%
Revenue Next 3Y-22.76%
Revenue Next 5Y-9.97%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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 22.99, the valuation of SWX can be described as rather expensive.
- Based on the Price/Earnings ratio, SWX is valued a bit more expensive than the industry average as 78.57% of the companies are valued more cheaply.
- SWX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
- SWX is valuated rather expensively with a Price/Forward Earnings ratio of 19.95.
- SWX's Price/Forward 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.
- SWX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.99 | ||
| Fwd PE | 19.95 |
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 | 10.01 |
4.3 Compensation for Growth
- SWX's 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 16.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.43
PEG (5Y)N/A
EPS Next 2Y15.05%
EPS Next 3Y16.1%
5. Dividend
5.1 Amount
- SWX has a Yearly Dividend Yield of 2.96%.
- Compared to an average industry Dividend Yield of 3.96, SWX is paying slightly less dividend.
- SWX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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 been paying a dividend for at least 10 years, so it has 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
- 38.44% of the earnings are spent on dividend by SWX. This is a low number and sustainable payout ratio.
- The dividend of SWX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.44%
EPS Next 2Y15.05%
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 2 / 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%.