Artesian Resources Corp (ARTNA) stock analysis

P/E below its 5-year median

Artesian Resources's P/E of 14.4 is below its own 5-year median of 21.6.

P/E below the industry

Artesian Resources's P/E of 14.4 is below the Water Supply median of 22.4.

EV/EBITDA below its 5-year median

Artesian Resources's EV/EBITDA of 11.6 is below its 5-year median of 14.9.

P/B below the industry

Artesian Resources's price-to-book of 1.29 is below the Water Supply median of 1.79.

Trading below fair value

The share price of $32.56 is below our fair value estimate of $45.27.

Margin of safety over 20%

The price is 28.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 4.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 5.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 3.9% over the last twelve months, against a 5-year average of 6.3% a year.

Growing slower than the industry

Revenue grew 5.9% over the last twelve months; the Water Supply median is 5.9%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 9.2% over the last twelve months and averaged 9.1% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.5%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Artesian Resources's return on equity of 9.2% is below the Water Supply median of 9.2%.

Earnings grew over 5 years

Net income grew 6.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 19.8% over the last twelve months, against a 5-year average of 18.5%.

Net margin below the industry

Artesian Resources's net margin of 19.8% is below the Water Supply median of 20.1%.

High debt

Debt is 70.0% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 85.0% five years ago to 70.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 24.4% of total debt.

Interest not well covered

Operating income covers interest expense 3.2 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.93 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.71; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Artesian Resources paid dividends worth 3.9% of the share price over the last twelve months.

Yield below Treasuries

The 3.9% yield is below the 4.6% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.9% or more; Artesian Resources yields 3.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 55.9% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.