California Water Service Group

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CWT : NYSE : Utilities
$33.05 up 0.05 | 0.15%
Today's Range: 32.85 - 33.2
Avg. Daily Volume: 240400.0
01/17/17 - 4:02 PM ET

Financial Analysis


CALIFORNIA WATER SERVICE GP's gross profit margin for the third quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. CALIFORNIA WATER SERVICE GP has weak liquidity. Currently, the Quick Ratio is 0.66 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.74% 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 FY16 Q3 FY15
Net Sales ($mil)184.27183.54
EBITDA ($mil)59.1962.84
EBIT ($mil)43.347.49
Net Income ($mil)22.8825.12


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)21.3550.83
Total Assets ($mil)2386.042306.52
Total Debt ($mil)618.77559.63
Equity ($mil)652.01640.85


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin32.1234.24
EBITDA Margin32.1134.23
Operating Margin23.525.88
Sales Turnover0.250.25
Return on Assets1.762.07
Return on Equity6.457.47
Debt Q3 FY16 Q3 FY15
Current Ratio0.740.64
Debt/Capital0.490.47
Interest Expense8.497.2
Interest Coverage5.16.6


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)47.9747.88
Div / share0.170.17
EPS0.480.52
Book value / share13.5913.39
Institutional Own % n/a n/a
Avg Daily Volume240907.0192834.0

Valuation


BUY. CALIFORNIA WATER SERVICE GP's P/E ratio indicates a significant premium compared to an average of 23.20 for the Water Utilities industry and a significant premium compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 2.40 indicates a discount versus the S&P 500 average of 2.84 and a discount versus the industry average of 2.46. The price-to-sales ratio is well 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 37.10 Peers 23.20   CWT 10.35 Peers 12.69

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.

 

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 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 25.12 Peers 20.28   CWT NM Peers 3.28

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CWT 2.40 Peers 2.46   CWT -12.00 Peers 2247.26

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 2.62 Peers 10.43   CWT 1.62 Peers 15.03

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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