California Water Service Group

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CWT : NYSE : Utilities
$35.0 up 0.45 | 1.3%
Today's Range: 34.325 - 35.15
Avg. Daily Volume: 182900.0
03/29/17 - 4:02 PM ET

Financial Analysis


CALIFORNIA WATER SERVICE GP's gross profit margin for the fourth quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CALIFORNIA WATER SERVICE GP has weak liquidity. Currently, the Quick Ratio is 0.51 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.69% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)150.93138.43
EBITDA ($mil)42.7733.85
EBIT ($mil)26.9518.48
Net Income ($mil)15.098.48


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)25.498.84
Total Assets ($mil)2411.752246.1
Total Debt ($mil)655.05552.5
Equity ($mil)659.47642.16


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin28.3424.45
EBITDA Margin28.3424.45
Operating Margin17.8513.35
Sales Turnover0.250.26
Return on Assets2.012.0
Return on Equity7.387.01
Debt Q4 FY16 Q4 FY15
Current Ratio0.570.86
Debt/Capital0.50.46
Interest Expense8.487.85
Interest Coverage3.182.35


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)47.9747.88
Div / share0.170.17
EPS0.310.18
Book value / share13.7513.41
Institutional Own % n/a n/a
Avg Daily Volume182791.0237513.0

Valuation


BUY. The current P/E ratio indicates a significant premium compared to an average of 23.93 for the Water Utilities industry and a premium compared to the S&P 500 average of 26.33. Conducting a second comparison, its price-to-book ratio of 2.53 indicates a discount versus the S&P 500 average of 2.93 and a premium versus the industry average of 2.50. 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 34.46 Peers 23.93   CWT 10.45 Peers 13.16

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 24.87 Peers 20.30   CWT 1.21 Peers 2.56

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 2.53 Peers 2.50   CWT 7.44 Peers 2174.34

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 2.74 Peers 13.22   CWT 3.56 Peers 10.71

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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