CPK Stock Overview
Chesapeake Utilities Corporation operates as an energy delivery company.
Chesapeake Utilities Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$115.39|
|52 Week High||US$146.30|
|52 Week Low||US$114.49|
|1 Month Change||-9.16%|
|3 Month Change||-12.62%|
|1 Year Change||-7.24%|
|3 Year Change||21.68%|
|5 Year Change||46.62%|
|Change since IPO||1,182.11%|
Recent News & Updates
Chesapeake Utilities: Great Dividend Growth At A High Price
Summary Chesapeake Utilities is a quiet compounder in the utilities space with a low starting yield but good dividend growth rates. Long-term growth has been good, and the company has a strong financial position. Given the rich valuation, however, this looks like a Hold for me and I will wait for a better entry price. Given the recent market declines, I remain interested in utilities for security and safety. People will continue to need power and water, no matter what happens to the economy. Given the circumstances of rising inflation and interest rates, I am also looking for stable and strong utilities. Fitting this bill is Chesapeake Utilities (CPK). In this article, I will walk you through what I see in this company and provide an assessment of why I think it remains a Hold at this time. Background on Chesapeake Utilities Chesapeake traces its roots back to 1859 with the establishment of the Dover Gas Light Company. As a contemporary utility firm, they operate in both regulated and unregulated segments with diverse interests, as well as successes, being recognized for the Best for Corporate Governance award in August 2022. They have natural gas and electric distribution in Delaware, Maryland, and Florida, which are regulated utility segments, along with the natural gas transmission subsidiary and Aspire Energy Express as an intra-state pipeline subsidiary. Recent results and operations Like many other firms, Chesapeake has faced delays and challenges in the present environment. In the Q2 earnings call, they reaffirmed the earnings guidance for 2025, in the range of $6.05 to $6.25, for a five-year CAGR of 9.1-9.5%. The present situation has resulted in shifts in the capital expenditures, as noted on the Q2 earnings call: as a result of ongoing short-term supply chain constraints and regulatory delays, we've adjusted our capital expenditure expectations in 2022 to $140 million to $175 million [...] a temporary shift from our original guidance range of $175 million to $200 million. To reiterate again, this adjustment does not reflect a negative outlook on the actual projects. Rather, it highlights the challenges that we and many companies are experiencing with securing raw materials, permitting, regulatory approval timing, and the logistics to complete the work, most of which were unforeseen at the beginning of the year. The current environment, with higher interest charges, has negatively impacted earnings, but the diluted earnings per share were 0.96 per share, with a 10.5% growth on a year-to-date basis, showing the continued effectiveness and steady growth even in this uncertain environment. There are several reasons to invest in utilities during a market downturn. One reason is that utility companies are typically less affected by economic downturns than other types of companies. This is because people still need to use utilities even when they are cutting back on other expenses. Another reason to invest in utilities during a downturn is that they usually have high dividend yields. This means that you can earn a higher return on your investment, even if the stock price doesn't increase. We will continue to examine these reasons to consider Chesapeake next. Income and dividend opportunities when investing in Chesapeake Many investors look to utilities as a good income opportunity. Seeking Alpha gives Chesapeake an "A-" for both dividend safety and growth, but an "F" for yield. Seeking Alpha shows Chesapeake provides a low (for a utility stock!) dividend yield of 1.7% but a strong 10.01% five-year DGR. I've recently covered other utilities and thus far, Chesapeake provides a low yield relative to others, even other gas utilities, but a strong dividend growth rate. This suggests that buying at the right price may lead to a reasonable yield on cost for the long-term investor. Chesapeake Utilities compared to its peers For a comparison with peers, I am looking to see how Chesapeake stacks up both in terms of valuation and also investment opportunity and safety. I've selected a range of peers in gas utilities but also included more diversity here: New Jersey Resources Corporation (NJR) Northwest Natural Holding Company (NWN) ONE Gas, Inc. (OGS) OPAL Fuels Inc. (OPAL); this pick is a little unusual, but I like the comparison with OPAL due to the focus on renewable natural gas. RGC Resources, Inc. (RGCO) Suburban Propane Partners, L.P. (SPH) Spire Inc. (SR) How does Chesapeake stack up to its peers in terms of valuation? It is richly valued - on Table 1 I have included the highest two options in bold for each of the metrics. While I acknowledge OPAL is a relatively different company, showing up as the highest in each category, Chesapeake remains the second highest in terms of Price/Book and Price/Sales (LTM). For the EV/EBITDA valuation, Chesapeake remains higher than the average value. Also, it is worth noting that Seeking Alpha gives Chesapeake a "D-" valuation grade. Table 1. Chesapeake vs peers showing relative valuations Full Ticker EV/EBITDA Price/Book Price/LTM Sales CPK 13.94 2.74 3.54 NJR 15.47 2.33 1.54 NWN 10.28 1.43 1.74 OGS 15.51 1.73 1.88 OPAL 19.37 27.49 7.39 RGCO 11.85 1.97 2.49 SPH 7.08 1.76 0.68 SR 12.27 1.37 1.64 Average 13.22 5.10 2.61 Source: Author, with data from Finbox.io While Chesapeake looks richly valued, it does not seem unwarranted. Table 2 provides some insight into dividends and a few financial stability measures. Considering the income opportunities, Chesapeake provides the lowest dividend yield but the second-highest dividend CAGR. However, when we look at the ROIC, it comes in above average and a reasonable value. Further, they have a good interest coverage ratio, higher than these peers, and the lowest Debt/Common Equity ratio, and a respectable Piotroski Score of 6. These values suggest that, while richly valued, Chesapeake can provide some stability and security. Table 2. Chesapeake vs peers in terms of dividends and financial stability Full Ticker Dividend Yield Dividend CAGR (5y) Return on Invested Capital Interest Coverage Ratio Debt/Common Equity Piotroski Score CPK 1.7% 9.5% 6.8% 6.49 93.2% 6 NJR 3.6% 7.3% 6.1% 4.12 173.2% 5 NWN 4.1% 0.5% 4.7% 3.19 118.4% 6 OGS 3.2% 10.6% 3.9% 5.29 170.1% 6 OPAL 0.0% NM- NM 1.16 426.8% 3 RGCO 3.7% 6.5% 4.9% 3.65 124.2% 5 SPH 8.2% -21.8% 11.9% 4.04 214.9% 7 SR 4.0% 5.8% 4.8% 3.43 151.6% 4 3.6% 2.6% 6.2% 3.92 184% 5.3 Source: Author, with data from Finbox.io Valuation for Chesapeake Utilities and the investment opportunity When I look to assess investment opportunities and the impact of the present valuations, I often turn to FAST Graphs. The software uses the analysts' estimates of earnings coupled with a target P/E multiple to assess likely returns if prices achieve the particular multiple at a point in time. The calculation function then provides an estimated price and, based on this, the rate of return. To be useful, we need both a reasonable estimate of what the P/E multiple should be and accurate analysts' estimates. The FAST Graphs' analyst scorecard shows that the analysts' two-year forward estimate (with a 20% margin for error) is a hit 92% of the time, a beat 8% of the time, with no misses. The one-year forward estimate is a beat 23% of the time, a hit 77% of the time, with no misses. The analysts' accuracy is a testament to the effectiveness and stability provided by this investment opportunity. We can also examine the lower panel in Figure 1 to get an insight into how the analysts' consensus estimate has changed over the last six months; we see that there is stability in the estimates, again providing an indication of the reliability of the earnings estimates. To evaluate the potential returns, we can use the FAST Graphs forecasting calculator (Figure 1). If we take the end of 2024 as the target, and consider the valuation assessments provided earlier (which are rich), we can select a more reasonable P/E multiple we might expect in 2024. Given that Chesapeake is, in my mind, a well-run utility, I've opted to use what I think is a generous 19.5x P/E as a target for 2024. The 'normalized' P/E provided by FAST Graphs of 24.86x, as achieved over the last five years, appears too high. A 15x would undervalue this solid utility. Figure 1. Analysts' estimates and a P/E used to calculate a target price and the rate of return for an investment in Chesapeake Utilities (FAST Graphs) I could make an argument for an 18x P/E in 2024, and this would give a total rate of return of -11.9% or an annualized RoR of -5.4% (Source: FAST Graphs forecasting calculators).
Chesapeake Utilities (NYSE:CPK) Has Some Way To Go To Become A Multi-Bagger
What are the early trends we should look for to identify a stock that could multiply in value over the long term...
|CPK||US Gas Utilities||US Market|
Return vs Industry: CPK underperformed the US Gas Utilities industry which returned -2.1% over the past year.
Return vs Market: CPK exceeded the US Market which returned -23.2% over the past year.
|CPK Average Weekly Movement||3.1%|
|Gas Utilities Industry Average Movement||3.3%|
|Market Average Movement||6.8%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: CPK is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: CPK's weekly volatility (3%) has been stable over the past year.
About the Company
Chesapeake Utilities Corporation operates as an energy delivery company. The company operates through two segments, Regulated Energy and Unregulated Energy. The Regulated Energy segment engages in the natural gas distribution operations in central and southern Delaware, Maryland’s eastern shore, and Florida; regulated natural gas transmission in the Delmarva Peninsula and Florida; and regulated electric distribution in northeast and northwest Florida.
Chesapeake Utilities Fundamentals Summary
|CPK fundamental statistics|
Is CPK overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|CPK income statement (TTM)|
|Cost of Revenue||US$398.39m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||5.03|
|Net Profit Margin||14.15%|
How did CPK perform over the long term?See historical performance and comparison
1.9%Current Dividend Yield
Is CPK undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CPK?
Other financial metrics that can be useful for relative valuation.
|What is CPK's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does CPK's PE Ratio compare to its peers?
|CPK PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
NWN Northwest Natural Holding
OGS ONE Gas
SJI South Jersey Industries
CPK Chesapeake Utilities
Price-To-Earnings vs Peers: CPK is expensive based on its Price-To-Earnings Ratio (23x) compared to the peer average (19.5x).
Price to Earnings Ratio vs Industry
How does CPK's PE Ratio compare vs other companies in the Global Gas Utilities Industry?
Price-To-Earnings vs Industry: CPK is expensive based on its Price-To-Earnings Ratio (23x) compared to the Global Gas Utilities industry average (13.7x)
Price to Earnings Ratio vs Fair Ratio
What is CPK'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.
|Current PE Ratio||23x|
|Fair PE Ratio||19.7x|
Price-To-Earnings vs Fair Ratio: CPK is expensive based on its Price-To-Earnings Ratio (23x) compared to the estimated Fair Price-To-Earnings Ratio (19.7x).
Share Price vs Fair Value
What is the Fair Price of CPK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CPK ($115.39) is trading above our estimate of fair value ($70.65)
Significantly Below Fair Value: CPK is trading above our estimate of fair value.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Chesapeake Utilities forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CPK's forecast earnings growth (6.4% per year) is above the savings rate (1.9%).
Earnings vs Market: CPK's earnings (6.4% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: CPK's earnings are forecast to grow, but not significantly.
Revenue vs Market: CPK's revenue (3.3% per year) is forecast to grow slower than the US market (7.7% per year).
High Growth Revenue: CPK's revenue (3.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CPK's Return on Equity is forecast to be low in 3 years time (11.6%).
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How has Chesapeake Utilities performed over the past 5 years?
Past Performance Score4/6
Past Performance Score 4/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CPK has high quality earnings.
Growing Profit Margin: CPK's current net profit margins (14.2%) are lower than last year (14.7%).
Past Earnings Growth Analysis
Earnings Trend: CPK's earnings have grown by 10.7% per year over the past 5 years.
Accelerating Growth: CPK's earnings growth over the past year (12.6%) exceeds its 5-year average (10.7% per year).
Earnings vs Industry: CPK earnings growth over the past year (12.6%) exceeded the Gas Utilities industry 10.2%.
Return on Equity
High ROE: CPK's Return on Equity (10.9%) is considered low.
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How is Chesapeake Utilities's financial position?
Financial Health Score1/6
Financial Health Score 1/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: CPK's short term assets ($145.0M) do not cover its short term liabilities ($287.3M).
Long Term Liabilities: CPK's short term assets ($145.0M) do not cover its long term liabilities ($1.0B).
Debt to Equity History and Analysis
Debt Level: CPK's net debt to equity ratio (90.7%) is considered high.
Reducing Debt: CPK's debt to equity ratio has increased from 77.4% to 91.2% over the past 5 years.
Debt Coverage: CPK's debt is not well covered by operating cash flow (18.8%).
Interest Coverage: CPK's interest payments on its debt are well covered by EBIT (6.5x coverage).
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What is Chesapeake Utilities's current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Chesapeake Utilities Dividend Yield vs Market|
|Company (Chesapeake Utilities)||1.9%|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Gas Utilities)||3.5%|
|Analyst forecast in 3 Years (Chesapeake Utilities)||2.1%|
Notable Dividend: CPK's dividend (1.85%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: CPK's dividend (1.85%) is low compared to the top 25% of dividend payers in the US market (4.73%).
Stability and Growth of Payments
Stable Dividend: CPK's dividends per share have been stable in the past 10 years.
Growing Dividend: CPK's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (39.1%), CPK's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: CPK is paying a dividend but the company has no free cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Jeff Householder (64 yo)
Mr. Jeffry M. Householder, also known as Jeff, has been President, Chief Executive Officer and Director of Chesapeake Utilities Corporation since January 1, 2019. Mr. Householder served as President of Flo...
CEO Compensation Analysis
|Jeff Householder's Compensation vs Chesapeake Utilities Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$3m||US$715k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$2m||US$675k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$3m||US$615k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$819k||US$338k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$719k||US$316k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$758k||US$302k|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$670k||US$292k|
Compensation vs Market: Jeff's total compensation ($USD2.83M) is below average for companies of similar size in the US market ($USD5.58M).
Compensation vs Earnings: Jeff's compensation has been consistent with company performance over the past year.
Experienced Management: CPK's management team is considered experienced (3.5 years average tenure).
Experienced Board: CPK's board of directors are seasoned and experienced ( 13 years average tenure).
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.
Recent Insider Transactions
|14 Jan 22||SellUS$133,449||Thomas Hill||Individual||988||US$135.07|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Chesapeake Utilities Corporation's employee growth, exchange listings and data sources
- Name: Chesapeake Utilities Corporation
- Ticker: CPK
- Exchange: NYSE
- Founded: 1859
- Industry: Gas Utilities
- Sector: Utilities
- Implied Market Cap: US$2.047b
- Shares outstanding: 17.74m
- Website: https://www.chpk.com
Number of Employees
- Chesapeake Utilities Corporation
- 909 Silver Lake Boulevard
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|CPK||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Jan 1969|
|CH5||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 1969|
|CPK||SNSE (Santiago Stock Exchange)||Yes||Common Stock||CL||USD||Jan 1969|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/02 00:00|
|End of Day Share Price||2022/09/30 00:00|
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.