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California Water Service Group
CWT : NYSE : Utilities
$24.41 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 188,600
12/18/14 - 4:04 PM ET

Financial Analysis


CALIFORNIA WATER SERVICE GP's gross profit margin for the third quarter of its fiscal year 2014 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. CALIFORNIA WATER SERVICE GP has weak liquidity. Currently, the Quick Ratio is 0.73 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.66% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY14 Q3 FY13
Net Sales ($mil)191.18184.4
EBITDA ($mil)74.7261.47
EBIT ($mil)60.0746.97
Net Income ($mil)33.6529.15


Balance Sheet Q3 FY14 Q3 FY13
Cash & Equiv. ($mil)29.4948.85
Total Assets ($mil)2069.082083.43
Total Debt ($mil)491.16489.76
Equity ($mil)622.28600.25


Profitability Q3 FY14 Q3 FY13
Gross Profit Margin39.0833.34
EBITDA Margin39.0833.33
Operating Margin31.4225.47
Sales Turnover0.290.27
Return on Assets2.462.23
Return on Equity8.197.76
Debt Q3 FY14 Q3 FY13
Current Ratio0.820.87
Debt/Capital0.440.45
Interest Expense7.227.69
Interest Coverage8.326.11


Share Data Q3 FY14 Q3 FY13
Shares outstanding (mil)47.8147.74
Div / share0.160.16
EPS0.70.61
Book value / share13.0212.57
Institutional Own % n/a n/a
Avg Daily Volume176636.0134508.0

Valuation


BUY. CALIFORNIA WATER SERVICE GP's P/E ratio indicates a premium compared to an average of 19.24 for the Water Utilities industry and a premium compared to the S&P 500 average of 19.74. For additional comparison, its price-to-book ratio of 1.84 indicates a discount versus the S&P 500 average of 2.73 and a discount versus the industry average of 1.91. The price-to-sales ratio is above the S&P 500 average, but well below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CWT 22.42 Peers 19.24   CWT 9.36 Peers 16.83

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

CWT is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CWT is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CWT 19.19 Peers 19.73   CWT 2.86 Peers 2.88

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

CWT is trading at a premium to its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CWT trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CWT 1.84 Peers 1.91   CWT 9.18 Peers 14.20

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CWT is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CWT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CWT 1.93 Peers 6.13   CWT 3.82 Peers 3.74

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CWT is trading at a significant discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

CWT is keeping pace with its peers on the basis of sales growth.

 

 

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