California Water Service Group

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CWT : NYSE : Utilities
$35.05 up 0.45 | 1.3%
Today's Range: 34.65 - 35.25
Avg. Daily Volume: 182200.0
05/24/17 - 10:50 AM ET

Financial Analysis


CALIFORNIA WATER SERVICE GP's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. CALIFORNIA WATER SERVICE GP has very weak liquidity. Currently, the Quick Ratio is 0.37 which clearly 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 2.90% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)122.04121.73
EBITDA ($mil)26.3721.39
EBIT ($mil)7.175.35
Net Income ($mil)1.13-0.8


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)11.9930.88
Total Assets ($mil)2440.32299.81
Total Debt ($mil)687.95598.46
Equity ($mil)651.33632.97


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin21.6117.57
EBITDA Margin21.617.57
Operating Margin5.874.39
Sales Turnover0.250.26
Return on Assets2.071.85
Return on Equity7.766.73
Debt Q1 FY17 Q1 FY16
Current Ratio0.440.94
Debt/Capital0.510.49
Interest Expense8.718.07
Interest Coverage0.820.66


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)48.0247.97
Div / share0.180.17
EPS0.02-0.02
Book value / share13.5613.19
Institutional Own % n/a n/a
Avg Daily Volume189326.0220354.0

Valuation


BUY. CALIFORNIA WATER SERVICE GP's P/E ratio indicates a premium compared to an average of 23.37 for the Water Utilities industry and a premium compared to the S&P 500 average of 25.02. Conducting a second comparison, its price-to-book ratio of 2.48 indicates a discount versus the S&P 500 average of 3.00 and a premium versus the industry average of 2.45. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, CALIFORNIA WATER SERVICE GP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CWT 32.00 Peers 23.37   CWT 11.27 Peers 11.54

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

CWT is trading at a significant premium to its peers.

 

Average. 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 valuation on par 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 24.02 Peers 20.57   CWT 1.15 Peers 2.98

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 significant premium to its peers.

 

Discount. 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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CWT 2.48 Peers 2.45   CWT 17.97 Peers 1937.23

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 2.65 Peers 14.50   CWT 3.66 Peers 9.41

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CWT significantly trails its peers on the basis of sales growth

 

 

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