SOUTHWEST GAS HOLDINGS INC (SWX) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SWX - US8448951025 - Common Stock
81.94 USD
-1.92 (-2.29%)
81.94 USD
0 (0%)
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 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.
- In the past year SWX had a positive cash flow from operations.
- 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
- SWX has a Return On Assets of 4.49%. This is in the better half of the industry: SWX outperforms 78.57% of its industry peers.
- The Return On Equity of SWX (11.81%) is better than 64.29% of its industry peers.
- SWX has a worse Return On Invested Capital (4.42%) than 71.43% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for SWX is below the industry average of 6.27%.
- 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
- SWX has a better Profit Margin (11.59%) 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.
- SWX's Operating Margin has declined in the last couple of years.
- 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
- SWX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for SWX has been increased compared to 1 year ago.
- 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
- SWX has an Altman-Z score of 1.29. This is a bad value and indicates that SWX is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.29, SWX is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
- A Debt/Equity ratio of 0.89 indicates that SWX is somewhat dependend on debt financing.
- With a decent Debt to Equity ratio value of 0.89, SWX is doing good in the industry, outperforming 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.29 |
ROIC/WACC0.65
WACC6.78%
2.3 Liquidity
- SWX has a Current Ratio of 1.55. This is a normal value and indicates that SWX is financially healthy and should not expect problems in meeting its short term obligations.
- With an excellent Current ratio value of 1.55, SWX belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- A Quick Ratio of 1.43 indicates that SWX should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.43, SWX belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
| 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.
- SWX shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.36% yearly.
- 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
- SWX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.21% yearly.
- 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
- The Price/Earnings ratio is 22.57, which indicates a rather expensive current valuation of SWX.
- 78.57% of the companies in the same industry are cheaper than SWX, based on the Price/Earnings ratio.
- SWX is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- SWX is valuated rather expensively with a Price/Forward Earnings ratio of 19.59.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of SWX indicates a slightly more expensive valuation: SWX is more expensive than 71.43% of the companies listed in the same industry.
- SWX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.57 | ||
| Fwd PE | 19.59 |
4.2 Price Multiples
- SWX's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 9.92 |
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)1.41
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%.
- SWX's Dividend Yield is slightly below the industry average, which is at 3.96.
- Compared to an average S&P500 Dividend Yield of 1.82, 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 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 38.44% of its income as dividend. This is a sustainable payout ratio.
- SWX's earnings are growing more than its dividend. This makes the dividend growth 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%.