Duxton Water (ASX:D2O) - Share price, News & Analysis

Q: What is the Fair Price of D2O when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

D2O (A$1.68) is trading below our estimate of [[fair value]] (A$1.89)

D2O fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	0/6
Past Performance	3/6
Financial Health	2/6
Dividends	3/6

D2O Stock Overview

Duxton Water Limited provides water supply solutions through its water entitlements.

Rewards

Trading at 11% below our estimate of its fair value

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Duxton Water Competitors

Ranhill Utilities Berhad

KLSE:RANHILL

RM554.1m

Thessaloniki Water Supply & Sewerage Co

ATSE:EYAPS

€159.0m

VA Tech Wabag

NSEI:WABAG

₹15.4b

Kangda International Environmental

SEHK:6136

HK$1.4b

Price History & Performance

Summary of all time highs, changes and price drops for Duxton Water
Historical stock prices
Current Share Price	AU$1.68
52 Week High	AU$1.76
52 Week Low	AU$1.38
Beta	-0.21
1 Month Change	2.44%
3 Month Change	8.39%
1 Year Change	19.15%
3 Year Change	22.63%
5 Year Change	58.49%
Change since IPO	52.73%

Recent News & Updates

Mar 06

Duxton Water (ASX:D2O) Is Increasing Its Dividend To AU$0.032

The board of Duxton Water Limited ( ASX:D2O ) has announced that the dividend on 29th of April will be increased to...

Shareholder Returns

	D2O	AU Water Utilities	AU Market
7D	-1.8%	1.2%	0.7%
1Y	19.1%	-7.0%	-8.5%

Return vs Industry: D2O exceeded the Australian Water Utilities industry which returned -7% over the past year.

Return vs Market: D2O exceeded the Australian Market which returned -8.5% over the past year.

Price Volatility

Is D2O's price volatile compared to industry and market?
D2O volatility
D2O Average Weekly Movement	3.2%
Water Utilities Industry Average Movement	4.3%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	18.1%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: D2O is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: D2O's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2016	n/a	n/a	https://www.duxtonwater.com.au

Duxton Water Limited provides water supply solutions through its water entitlements. It supports farmers across the viticulture, nut, citrus, vegetable, olive, dried fruit, dairy, and broadacre cropping industries. The company was incorporated in 2016 and is based in Stirling, Australia.

Duxton Water Fundamentals Summary

How do Duxton Water's earnings and revenue compare to its market cap?
D2O fundamental statistics
Market Cap	AU$202.32m
Earnings (TTM)	AU$8.54m
Revenue (TTM)	AU$29.27m

23.4x

P/E Ratio

6.8x

P/S Ratio

Is D2O overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
D2O income statement (TTM)
Revenue	AU$29.27m
Cost of Revenue	AU$13.70m
Gross Profit	AU$15.57m
Other Expenses	AU$7.03m
Earnings	AU$8.54m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.072
Gross Margin	53.19%
Net Profit Margin	29.18%
Debt/Equity Ratio	72.6%

How did D2O perform over the long term?

See historical performance and comparison

Dividends

3.8%

Current Dividend Yield

88%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is D2O undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for D2O?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for D2O. This is calculated by dividing D2O's market cap by their current preferred multiple.
What is D2O's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$202.32m

D2O key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10.3x
Enterprise Value/EBITDA	n/a
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does D2O's PE Ratio compare to its peers?

D2O PE Ratio vs Peers

The above table shows the PE ratio for D2O vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.4x
RANHILL Ranhill Utilities Berhad	18.1x	27.2%	RM554.1m
EYAPS Thessaloniki Water Supply & Sewerage Co	14x	n/a	€159.0m
WABAG VA Tech Wabag	10.5x	18.7%	₹15.4b
6136 Kangda International Environmental	2.9x	n/a	HK$1.4b
D2O Duxton Water	23.4x	n/a	AU$202.3m

Price-To-Earnings vs Peers: D2O is expensive based on its Price-To-Earnings Ratio (23.4x) compared to the peer average (11.4x).

Price to Earnings Ratio vs Industry

How does D2O's PE Ratio compare vs other companies in the Global Water Utilities Industry?

Price-To-Earnings vs Industry: D2O is expensive based on its Price-To-Earnings Ratio (23.4x) compared to the Global Water Utilities industry average (15.5x)

Price to Earnings Ratio vs Fair Ratio

What is D2O's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

D2O PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	23.4x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate D2O's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of D2O when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: D2O (A$1.68) is trading below our estimate of fair value (A$1.89)

Significantly Below Fair Value: D2O is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Duxton Water forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.8%

Forecasted Utilities industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Duxton Water has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Duxton Water competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Duxton Water performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

32.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: D2O has high quality earnings.

Growing Profit Margin: D2O's current net profit margins (29.2%) are higher than last year (22%).

Past Earnings Growth Analysis

Earnings Trend: D2O has become profitable over the past 5 years, growing earnings by 32.9% per year.

Accelerating Growth: D2O's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: D2O had negative earnings growth (-1.8%) over the past year, making it difficult to compare to the Water Utilities industry average (0.5%).

Return on Equity

High ROE: D2O's Return on Equity (5.8%) is considered low.

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Financial Health

How is Duxton Water's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: D2O's short term assets (A$13.7M) exceed its short term liabilities (A$3.8M).

Long Term Liabilities: D2O's short term assets (A$13.7M) do not cover its long term liabilities (A$106.0M).

Debt to Equity History and Analysis

Debt Level: D2O's net debt to equity ratio (68.3%) is considered high.

Reducing Debt: D2O's debt to equity ratio has increased from 0.01% to 72.6% over the past 5 years.

Debt Coverage: D2O's debt is not well covered by operating cash flow (7.4%).

Interest Coverage: D2O's interest payments on its debt are well covered by EBIT (5.1x coverage).

Balance Sheet

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Dividend

What is Duxton Water current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.81%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: D2O's dividend (3.81%) is higher than the bottom 25% of dividend payers in the Australian market (2.56%).

High Dividend: D2O's dividend (3.81%) is low compared to the top 25% of dividend payers in the Australian market (6.36%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, D2O has been paying a dividend for less than 10 years.

Growing Dividend: D2O's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (88.4%), D2O's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (57.8%), D2O's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average board tenure

CEO

Duxton Water has no CEO, or we have no data on them.

Board Members

Experienced Board: D2O's board of directors are considered experienced (6.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: D2O insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/15 00:00
End of Day Share Price	2022/08/15 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31