California Water Service Group

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CWT : NYSE : Utilities
$32.56 -0.09 | -0.28%
Today's Range: 32.23 - 32.74
Avg. Daily Volume: 221,200
09/28/16 - 3:59 PM ET

Financial Analysis


CALIFORNIA WATER SERVICE GP's gross profit margin for the second quarter of its fiscal year 2016 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 weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.20% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)152.45144.41
EBITDA ($mil)41.2536.95
EBIT ($mil)25.421.6
Net Income ($mil)11.519.85


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)30.8324.52
Total Assets ($mil)2358.122243.05
Total Debt ($mil)637.02549.95
Equity ($mil)636.76623.04


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin27.0625.59
EBITDA Margin27.0525.58
Operating Margin16.6614.95
Sales Turnover0.250.27
Return on Assets1.872.51
Return on Equity6.959.06
Debt Q2 FY16 Q2 FY15
Current Ratio0.790.56
Debt/Capital0.50.47
Interest Expense8.437.06
Interest Coverage3.013.06


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)47.9747.88
Div / share0.170.17
EPS0.240.21
Book value / share13.2713.01
Institutional Own % n/a n/a
Avg Daily Volume257581.0280574.0

Valuation


BUY. CALIFORNIA WATER SERVICE GP's P/E ratio indicates a significant premium compared to an average of 23.64 for the Water Utilities industry and a significant premium compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 2.54 indicates valuation on par with the S&P 500 average of 2.82 and a premium versus the industry average of 2.51. 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 36.61 Peers 23.64   CWT 10.39 Peers 11.11

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 24.95 Peers 21.60   CWT 5.74 Peers 3.75

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.

 

Premium. 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 premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CWT 2.54 Peers 2.51   CWT -22.04 Peers 11.82

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 2.71 Peers 5.77   CWT 0.19 Peers 2.27

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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