California Water Service Group (CWT) stock analysis

P/E below its 5-year median

California Water Service's P/E of 22.2 is below its own 5-year median of 25.3.

P/E below the industry

California Water Service's P/E of 22.2 is below the Water Supply median of 22.6.

EV/EBITDA below its 5-year median

California Water Service's EV/EBITDA of 13.9 is below its 5-year median of 15.1.

P/S below the industry

California Water Service's price-to-sales of 3.07 is below the Water Supply median of 5.00 (book value is negative, so we use sales).

Trading below fair value

The share price of $49.67 is below our fair value estimate of $55.84.

Margin of safety under 20%

The price is 11.0% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 7.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 6.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 0.7% over the last twelve months, against a 5-year average of 5.8% a year.

Growing slower than the industry

Revenue grew 4.8% over the last twelve months; the Water Supply median is 5.9%.

Guidance unchanged

The latest outlook (2026 infrastructure investments, Jul 30, 2026) was maintained, so it neither adds nor takes away points.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 5.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 13.5% over the last twelve months, against a 5-year average of 13.3%.

Net margin below the industry

California Water Service's net margin of 13.5% is below the Water Supply median of 20.4%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 18.8% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.5 times; we look for at least 5.

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

Current assets are 0.71 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.87; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

California Water Service paid dividends worth 2.0% of the share price over the last twelve months.

Yield below Treasuries

The 2.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; California Water Service yields 2.0%.

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 57.4% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.