DB:EC9

Stock Analysis Report

Connecticut Water Service

Executive Summary

Connecticut Water Service, Inc., together with its subsidiaries, operates as a regulated water company.

Rewards

Earnings are forecast to grow 14.77% per year

Earnings grew by 32.3% over the past year

Pays a high and reliable dividend of 1.87%

Risk Analysis

Interest payments are not well covered by earnings



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Connecticut Water Service's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EC9 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

EC9

2.8%

DE Water Utilities

1.7%

DE Market


1 Year Return

n/a

EC9

34.3%

DE Water Utilities

15.0%

DE Market

Return vs Industry: Insufficient data to determine how EC9 performed against the German Water Utilities industry.

Return vs Market: Insufficient data to determine how EC9 performed against the German Market.


Shareholder returns

EC9IndustryMarket
7 Day0%2.8%1.7%
30 Day0.2%2.4%0.8%
90 Day2.4%14.6%3.7%
1 Yearn/a40.8%34.3%18.5%15.0%
3 Yearn/a33.8%16.5%17.1%6.9%
5 Yearn/a50.6%20.7%24.3%7.3%

Price Volatility Vs. Market

How volatile is Connecticut Water Service's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Connecticut Water Service undervalued compared to its fair value and its price relative to the market?

39.45x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EC9 (€63.5) is trading above our estimate of fair value (€26.15)

Significantly Below Fair Value: EC9 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: EC9 is poor value based on its PE Ratio (39.4x) compared to the Water Utilities industry average (17.6x).

PE vs Market: EC9 is poor value based on its PE Ratio (39.4x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: EC9 is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: EC9 is overvalued based on its PB Ratio (2.9x) compared to the XE Water Utilities industry average (1.5x).


Next Steps

Future Growth

How is Connecticut Water Service forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

14.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EC9's forecast earnings growth (14.8% per year) is above the savings rate (0.2%).

Earnings vs Market: EC9's earnings (14.8% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: EC9's earnings are forecast to grow, but not significantly.

Revenue vs Market: EC9's revenue (6.3% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: EC9's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EC9's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has Connecticut Water Service performed over the past 5 years?

-2.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EC9 has high quality earnings.

Growing Profit Margin: EC9's current net profit margins (17.9%) are higher than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: EC9's earnings have declined by -2.6% per year over the past 5 years.

Accelerating Growth: EC9's earnings growth over the past year (32.3%) exceeds its 5-year average (-2.6% per year).

Earnings vs Industry: EC9 earnings growth over the past year (32.3%) exceeded the Water Utilities industry 7.5%.


Return on Equity

High ROE: EC9's Return on Equity (7.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Connecticut Water Service's financial position?


Financial Position Analysis

Short Term Liabilities: EC9's short term assets ($40.4M) do not cover its short term liabilities ($95.9M).

Long Term Liabilities: EC9's short term assets ($40.4M) do not cover its long term liabilities ($589.9M).


Debt to Equity History and Analysis

Debt Level: EC9's debt to equity ratio (113.5%) is considered high.

Reducing Debt: EC9's debt to equity ratio has increased from 86.9% to 113.5% over the past 5 years.

Debt Coverage: EC9's debt is not well covered by operating cash flow (10.8%).

Interest Coverage: EC9's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

Inventory Level: EC9 has a high level of physical assets or inventory.

Debt Coverage by Assets: EC9's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Connecticut Water Service's current dividend yield, its reliability and sustainability?

1.87%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.3%markettop25%3.6%industryaverage3.8%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: EC9's dividend (1.87%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: EC9's dividend (1.87%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: EC9's dividends per share have been stable in the past 10 years.

Growing Dividend: EC9's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (71.3%), EC9's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EC9's dividends in 3 years are forecast to be covered by earnings (50.4% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

David Benoit (62yo)

2.1yrs

Tenure

US$1,574,880

Compensation

Mr. David C. Benoit, has been President and Chief Executive Officer of Connecticut Water Service, Inc. since March 7, 2018 and its Director since April 2, 2018. Previously, Mr. Benoit served as Chief Finan ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD1.57M) is about average for companies of similar size in the German market ($USD1.28M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David Benoit
President2.1yrsUS$1.57m0.38% $2.9m
Robert Doffek
CFO, Treasurer & Controller1.6yrsUS$359.44k0.022% $171.6k
Kristen Johnson
VP of Human Resources1.5yrsUS$479.30k0.0083% $63.8k
Daniel Meaney
Director of Corporate Communications0yrsno datano data
Richard Knowlton
Division President of The Maine Water Company2.5yrsno data0.062% $475.3k
Peter Bancroft
Director of Rates–Forecasting & Assistant Treasurer0yrsno datano data

2.3yrs

Average Tenure

59.5yo

Average Age

Experienced Management: EC9's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Benoit
President2.1yrsUS$1.57m0.38% $2.9m
Kristen Johnson
VP of Human Resources1.5yrsUS$479.30k0.0083% $63.8k
Ellen Wolf
Independent Director4.4yrsUS$84.20k0.017% $129.0k
Lisa Thibdaue
Independent Director19.8yrsUS$77.80k0.056% $433.2k
Mary Hanley
Independent Director20.8yrsUS$72.80k0.063% $482.2k
Carol Wallace
Independent Chairperson2.1yrsUS$143.40k0.065% $500.5k
Richard Forde
Independent Director6yrsUS$90.20k0.022% $168.0k
Heather Hunt
Independent Director13.3yrsUS$68.00k0.056% $429.4k
Bradford Hunter
Independent Director4.4yrsUS$77.40k0.017% $129.0k

4.4yrs

Average Tenure

63yo

Average Age

Experienced Board: EC9's board of directors are considered experienced (4.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Connecticut Water Service, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Connecticut Water Service, Inc.
  • Ticker: EC9
  • Exchange: DB
  • Founded: 1956
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: US$844.677m
  • Listing Market Cap: US$769.332m
  • Shares outstanding: 12.07m
  • Website: https://www.ctwater.com

Number of Employees


Location

  • Connecticut Water Service, Inc.
  • 93 West Main Street
  • Clinton
  • Connecticut
  • 6413
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CTWSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 1975
EC9DB (Deutsche Boerse AG)YesCommon StockDEEURJun 1975

Biography

Connecticut Water Service, Inc., together with its subsidiaries, operates as a regulated water company. The company operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The Water Operations segment supplies public drinking water and provides wastewater services. The Real Estate Transactions segment is involved in the sale or donation of its real estate holdings. The Services and Rentals segment provides contracted services to water utilities and other clients. It also provides contract operations of water facilities; Linebacker, a service line protection plan for public drinking water customers; and bulk deliveries of emergency drinking water to businesses and residences through tanker trucks. This segment also leases and rents residential and commercial properties to third parties. As of December 31, 2017, the company supplied water to 139,574 customers in 80 municipalities in Connecticut and Maine. Connecticut Water Service, Inc. was founded in 1956 and is headquartered in Clinton, Connecticut. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/09 22:16
End of Day Share Price2019/10/09 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.