Global Water Resources, Inc. (GWRS) stock analysis

P/E above its 5-year median

Global Water Resources's P/E of 56.5 is above its own 5-year median of 50.3.

P/E above the industry

Global Water Resources's P/E of 56.5 is above the Water Supply median of 22.7.

EV/EBITDA below its 5-year median

Global Water Resources's EV/EBITDA of 12.9 is below its 5-year median of 17.7.

P/B above the industry

Global Water Resources's price-to-book of 2.30 is above the Water Supply median of 1.80.

Trading below fair value

The share price of $6.78 is below our fair value estimate of $7.00.

Margin of safety under 20%

The price is 3.2% 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 -22.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -43.7% over the last twelve months, against a 5-year average of 21.8% a year.

Growing faster than the industry

Revenue grew 10.8% 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 3.9% over the last twelve months and averaged 12.0% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.0%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Global Water Resources's return on equity of 3.9% is below the Water Supply median of 9.2%.

Earnings grew over 5 years

Net income grew 21.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 5.2% over the last twelve months, against a 5-year average of 10.5%.

Net margin below the industry

Global Water Resources's net margin of 5.2% is below the Water Supply median of 20.1%.

High debt

Debt is 155% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 356% five years ago to 155%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 15.6% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.3 times; we look for at least 5.

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

Current assets are 0.68 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.46; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Global Water Resources paid dividends worth 4.1% of the share price over the last twelve months.

Yield below Treasuries

The 4.1% yield is below the 4.7% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Global Water Resources yields 4.1%.

Dividend not cut

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

Not covered by earnings

Dividends take 276% of net income, leaving little room.

Cash-flow cover

Needs dividends paid and free cash flow.