SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
NYSE:SWX - New York Stock Exchange, Inc. - US8448951025 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to SWX. SWX was compared to 14 industry peers in the Gas Utilities industry. SWX has a bad profitability rating. Also its financial health evaluation is rather negative. SWX has a expensive valuation and it also scores bad on growth.
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.
SWX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SWX has a worse Return On Assets (1.65%) than 71.43% of its industry peers.
SWX has a worse Return On Equity (5.67%) than 78.57% of its industry peers.
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.
SWX had an Average Return On Invested Capital over the past 3 years of 3.49%. This is below the industry average of 7.78%.
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
SWX has a Profit Margin of 3.89%. This is in the lower half of the industry: SWX underperforms 71.43% of its industry peers.
SWX's Profit Margin has declined in the last couple of years.
SWX's Operating Margin of 9.46% 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.
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
SWX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, SWX has more shares outstanding
The number of shares outstanding for SWX has been increased compared to 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 0.98, we must say that SWX is in the distress zone and has some risk of bankruptcy.
SWX has a Altman-Z score of 0.98. This is comparable to the rest of the industry: SWX outperforms 57.14% of its industry peers.
The Debt to FCF ratio of SWX is 12.34, which is on the high side as it means it would take SWX, 12.34 years of fcf income to pay off all of its debts.
SWX has a Debt to FCF ratio of 12.34. This is amongst the best in the industry. SWX outperforms 85.71% of its industry peers.
A Debt/Equity ratio of 1.43 is on the high side and indicates that SWX has dependencies on debt financing.
The Debt to Equity ratio of SWX (1.43) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.43 | ||
| Debt/FCF | 12.34 | ||
| Altman-Z | 0.98 |
ROIC/WACC0.55
WACC6.65%
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 (0.80) which is comparable to the rest of the industry.
SWX has a Quick 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.
With a decent Quick ratio value of 0.80, SWX is doing good in the industry, outperforming 78.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
SWX shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.78%.
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 decrease in Revenue. The Revenue has decreased by -5.92% 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)-6.78%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%23.01%
Revenue 1Y (TTM)-5.92%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-7.12%
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 8.71% on average per year.
SWX is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -10.30% yearly.
EPS Next Y15.33%
EPS Next 2Y14.78%
EPS Next 3Y13.54%
EPS Next 5Y8.71%
Revenue Next Year2.06%
Revenue Next 2Y4.86%
Revenue Next 3Y-17.68%
Revenue Next 5Y-10.3%
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
With a Price/Earnings ratio of 22.99, SWX is valued on the expensive side.
Based on the Price/Earnings ratio, SWX is valued a bit more expensive than 78.57% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.35. SWX is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 19.93, the valuation of SWX can be described as rather expensive.
71.43% of the companies in the same industry are cheaper than SWX, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, SWX is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.99 | ||
| Fwd PE | 19.93 |
4.2 Price Multiples
SWX's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, SWX is valued a bit cheaper than 78.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.73 | ||
| 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 13.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.5
PEG (5Y)N/A
EPS Next 2Y14.78%
EPS Next 3Y13.54%
5. Dividend
5.1 Amount
SWX has a Yearly Dividend Yield of 3.41%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.93, SWX is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.33, SWX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.41% |
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 Years17
Div Non Decr Years32
5.3 Sustainability
89.41% of the earnings are spent on dividend by SWX. This is not a sustainable payout ratio.
SWX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP89.41%
EPS Next 2Y14.78%
EPS Next 3Y13.54%
72.64
-0.17 (-0.23%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners92.87%
Inst Owner Change1.27%
Ins Owners0.44%
Ins Owner Change5.97%
Market Cap5.22B
Analysts75
Price Target79.56 (9.53%)
Short Float %2.1%
Short Ratio4.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.41% |
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%
PT rev (3m)-0.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.03%
EPS NY rev (1m)1.55%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)33.67%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.99 | ||
| Fwd PE | 19.93 | ||
| P/S | 1.02 | ||
| P/FCF | 12.73 | ||
| P/OCF | 3.85 | ||
| P/B | 1.49 | ||
| P/tB | 1.92 | ||
| EV/EBITDA | 10.01 |
EPS(TTM)3.16
EY4.35%
EPS(NY)3.64
Fwd EY5.02%
FCF(TTM)5.71
FCFY7.86%
OCF(TTM)18.88
OCFY25.99%
SpS71.18
BVpS48.79
TBVpS37.91
PEG (NY)1.5
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 | 0.98 |
F-Score6
WACC6.65%
ROIC/WACC0.55
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)-6.78%
EPS 3Y-4.78%
EPS 5Y-4.36%
EPS Q2Q%23.01%
EPS Next Y15.33%
EPS Next 2Y14.78%
EPS Next 3Y13.54%
EPS Next 5Y8.71%
Revenue 1Y (TTM)-5.92%
Revenue growth 3Y11.58%
Revenue growth 5Y10.38%
Sales Q2Q%-7.12%
Revenue Next Year2.06%
Revenue Next 2Y4.86%
Revenue Next 3Y-17.68%
Revenue Next 5Y-10.3%
EBIT growth 1Y-1.18%
EBIT growth 3Y9.39%
EBIT growth 5Y5.41%
EBIT Next Year116.12%
EBIT Next 3Y25.09%
EBIT Next 5Y20.12%
FCF growth 1Y220.72%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y154.36%
OCF growth 3Y130.03%
OCF growth 5Y22.06%