NYSE:CWT

Stock Analysis Report

California Water Service Group

Executive Summary

California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii.


Snowflake Analysis

Established dividend payer with questionable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-8.4%

CWT

-3.7%

US Water Utilities

-7.6%

US Market


1 Year Return

-5.0%

CWT

27.7%

US Water Utilities

10.2%

US Market

Return vs Industry: CWT underperformed the US Water Utilities industry which returned 27.7% over the past year.

Return vs Market: CWT underperformed the US Market which returned 10.2% over the past year.


Shareholder returns

CWTIndustryMarket
7 Day-8.4%-3.7%-7.6%
30 Day-6.6%-2.5%-4.5%
90 Day-2.9%8.8%-0.6%
1 Year-3.5%-5.0%29.9%27.7%12.5%10.2%
3 Year44.0%36.8%73.2%63.3%37.1%28.3%
5 Year131.5%108.8%149.1%123.9%60.8%43.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

35.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CWT ($52.67) is trading above our estimate of fair value ($19.63)

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


Price To Earnings Ratio

PE vs Industry: CWT is good value based on its PE Ratio (37.7x) compared to the Water Utilities industry average (38x).

PE vs Market: CWT is poor value based on its PE Ratio (37.7x) compared to the US market (17.1x).


Price to Earnings Growth Ratio

PEG Ratio: CWT is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: CWT is overvalued based on its PB Ratio (3.3x) compared to the US Water Utilities industry average (2.8x).


Next Steps

Future Growth

How is California Water Service Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CWT's forecast earnings growth (11.7% per year) is above the savings rate (1.7%).

Earnings vs Market: CWT's earnings (11.7% per year) are forecast to grow slower than the US market (13.2% per year).

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

Revenue vs Market: CWT's revenue (3.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CWT's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CWT's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has California Water Service Group performed over the past 5 years?

6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CWT has high quality earnings.

Growing Profit Margin: CWT's current net profit margins (9.5%) are lower than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: CWT's earnings have grown by 6.5% per year over the past 5 years.

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

Earnings vs Industry: CWT had negative earnings growth (-3.6%) over the past year, making it difficult to compare to the Water Utilities industry average (1%).


Return on Equity

High ROE: CWT's Return on Equity (8.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is California Water Service Group's financial position?


Financial Position Analysis

Short Term Liabilities: CWT's short term assets ($212.1M) do not cover its short term liabilities ($333.9M).

Long Term Liabilities: CWT's short term assets ($212.1M) do not cover its long term liabilities ($1.9B).


Debt to Equity History and Analysis

Debt Level: CWT's debt to equity ratio (126.9%) is considered high.

Reducing Debt: CWT's debt to equity ratio has increased from 78.9% to 126.9% over the past 5 years.

Debt Coverage: CWT's debt is not well covered by operating cash flow (19.5%).

Interest Coverage: CWT's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: CWT's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

1.70%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.5%markettop25%4.0%industryaverage1.6%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: CWT's dividend (1.61%) is higher than the bottom 25% of dividend payers in the US market (1.53%).

High Dividend: CWT's dividend (1.61%) is low compared to the top 25% of dividend payers in the US market (3.96%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.9%), CWT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CWT's dividends in 3 years are forecast to be well covered by earnings (48.8% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Marty Kropelnicki (52yo)

6.4yrs

Tenure

US$5,903,323

Compensation

Mr. Martin A. Kropelnicki, also known as Marty, has been the Chief Executive Officer and President of California Water Service Company since September 1, 2013 and also serves as its Director. Mr. Kropelnic ...


CEO Compensation Analysis

Compensation vs Market: Marty's total compensation ($USD5.90M) is about average for companies of similar size in the US market ($USD4.98M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Martin Kropelnicki
President6.4yrsUS$5.90m0.16% $3.9m
Thomas Smegal
VP, CFO & Treasurer7.3yrsUS$820.78k0.080% $1.9m
Lynne McGhee
VP & General Counsel5.1yrsUS$786.55k0.046% $1.1m
Paul Townsley
VP of Corporate Development & Chief Regulatory Officer1.1yrsUS$1.06m0.041% $991.6k
Robert Kuta
VP of Engineering and Chief Water Quality & Environmental Compliance Officer1.1yrsUS$913.98k0.017% $418.2k
David Healey
VP, Corporate Controller0yrsno data0.028% $682.6k
Michael Luu
VP of Customer Service & Chief Information Officer3.1yrsno data0.024% $583.1k
Shannon Dean
Vice President of Corporate Communications & Community Affairs5.1yrsno data0.023% $553.0k
Ronald Webb
Vice President of Human Resources5.5yrsno data0.031% $748.9k
Elissa Ouyang
Chief Procurement & Lead Continuous Improvement Officer3.9yrsno data0.0072% $172.8k

5.1yrs

Average Tenure

53yo

Average Age

Experienced Management: CWT's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Martin Kropelnicki
President6.4yrsUS$5.90m0.16% $3.9m
Peter Nelson
Non-Executive Chairman8.1yrsUS$265.57k0.030% $713.1k
Scott Morris
Director0.08yrsno data0.00053% $12.7k
Terry Bayer
Independent Director5.9yrsUS$168.47k0.027% $642.4k
Thomas Krummel
Independent Director9.6yrsUS$184.27k0.053% $1.3m
Shelly Esque
Independent Director1.7yrsUS$92.59k0.0056% $134.6k
Richard Magnuson
Lead Independent Director6.8yrsUS$212.47k0.11% $2.7m
Lester Snow
Independent Director8.9yrsUS$167.17k0.038% $908.2k
Gregory Aliff
Independent Director4.4yrsUS$184.92k0.020% $479.0k
Carol Pottenger
Independent Director2.4yrsUS$155.87k0.0088% $210.3k

6.2yrs

Average Tenure

65yo

Average Age

Experienced Board: CWT's board of directors are considered experienced (6.2 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: CWT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

California Water Service Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: California Water Service Group
  • Ticker: CWT
  • Exchange: NYSE
  • Founded: 1926
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: US$2.403b
  • Shares outstanding: 48.15m
  • Website: https://www.calwatergroup.com

Number of Employees


Location

  • California Water Service Group
  • 1720 North First Street
  • San Jose
  • California
  • 95112
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CWTNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
WT5BRSE (Berne Stock Exchange)YesCommon StockCHCHFJan 1969
CWT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1969

Biography

California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. It is involved in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection. The company offers its services to approximately 486,900 customer connections in 100 California communities; approximately 4,800 water and wastewater customer connections on the islands of Maui and Hawaii; approximately 17,600 customer connections in the Tacoma and Olympia areas in Washington; and approximately 8,200 water and wastewater customer connections in the Belen, Los Lunas, Indian Hills, and Elephant Butte areas in New Mexico. It also engages in the provision of non-regulated water-related services, including operating municipally owned water systems, privately owned water, and recycled water distribution systems; providing water system operation, meter reading, and billing services to private companies and municipalities; leasing communication antenna sites on its properties to telecommunication companies; billing optional third-party insurance programs to its residential customers; and providing lab services. California Water Service Group was founded in 1926 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 00:10
End of Day Share Price2020/02/27 00:00
Earnings2019/09/30
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.