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. 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.
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
SWX has a Return On Assets of 1.86%. This is in the lower half of the industry: SWX underperforms 71.43% of its industry peers.
SWX has a worse Return On Equity (6.29%) than 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.
Measured over the past 3 years, the Average Return On Invested Capital for SWX is below the industry average of 6.29%.
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
SWX has a worse Profit Margin (4.66%) than 71.43% of its industry peers.
SWX's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.90%, SWX is doing worse than 85.71% of the companies in the same industry.
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.
In the last couple of years the Gross Margin of SWX has declined.
| 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.
Compared to 1 year ago, SWX has more shares outstanding
Compared to 5 years ago, SWX has more shares outstanding
Compared to 1 year ago, SWX has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.99, we must say that SWX is in the distress zone and has some risk of bankruptcy.
SWX has a Altman-Z score (0.99) which is comparable to the rest of the industry.
The Debt to FCF ratio of SWX is 26.41, which is on the high side as it means it would take SWX, 26.41 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 26.41, SWX is in the better half of 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.
Looking at the Debt to Equity ratio, with a value of 1.40, SWX is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 26.41 | ||
| Altman-Z | 0.99 |
ROIC/WACC0.58
WACC6.8%
2.3 Liquidity
A Current Ratio of 0.79 indicates that SWX may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.79, SWX is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Quick Ratio of 0.79 indicates that SWX may have some problems paying its short term obligations.
SWX has a Quick ratio of 0.79. This is in the better half of the industry: SWX outperforms 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.
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 -10.78% 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
Based on estimates for the next years, SWX will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.30% on average per year.
The Revenue is expected to decrease by -10.55% on average over the next years. This is quite bad
EPS Next Y17.68%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
EPS Next 5Y9.3%
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
A Price/Earnings ratio of 22.40 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 78.57% of the companies in the same industry.
SWX is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 18.40 indicates a rather expensive valuation of SWX.
Based on the Price/Forward Earnings ratio, SWX is valued a bit more expensive than the industry average as 78.57% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of SWX to the average of the S&P500 Index (21.76), we can say SWX is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.4 | ||
| Fwd PE | 18.4 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SWX.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SWX indicates a somewhat cheap valuation: SWX is cheaper than 71.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.99 | ||
| EV/EBITDA | 9.75 |
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 13.78% in the coming years.
PEG (NY)1.27
PEG (5Y)N/A
EPS Next 2Y15.1%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
SWX has a Yearly Dividend Yield of 3.24%.
Compared to an average industry Dividend Yield of 3.95, SWX is paying slightly less dividend.
SWX's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
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 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.
SWX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP79.09%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
77.04
+0.51 (+0.67%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners91.89%
Inst Owner Change0%
Ins Owners0.45%
Ins Owner Change5.37%
Market Cap5.54B
Analysts76.67
Price Target80.24 (4.15%)
Short Float %2.31%
Short Ratio3.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
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)0.85%
PT rev (3m)0.85%
EPS NQ rev (1m)-1.26%
EPS NQ rev (3m)-14.05%
EPS NY rev (1m)0.14%
EPS NY rev (3m)1.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.98%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.4 | ||
| Fwd PE | 18.4 | ||
| P/S | 1.15 | ||
| P/FCF | 28.99 | ||
| P/OCF | 5.02 | ||
| P/B | 1.55 | ||
| P/tB | 1.98 | ||
| EV/EBITDA | 9.75 |
EPS(TTM)3.44
EY4.47%
EPS(NY)4.19
Fwd EY5.43%
FCF(TTM)2.66
FCFY3.45%
OCF(TTM)15.34
OCFY19.92%
SpS67.14
BVpS49.77
TBVpS38.9
PEG (NY)1.27
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 | 0.99 |
F-Score6
WACC6.8%
ROIC/WACC0.58
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 Y17.68%
EPS Next 2Y15.1%
EPS Next 3Y13.78%
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-4.48%
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%