Southwest Gas Holdings, Inc. (SWX) stock analysis

P/E below its 5-year median

Southwest Gas's P/E of 12.4 is below its own 5-year median of 26.7.

P/E below the industry

Southwest Gas's P/E of 12.4 is below the Gas Production and Distribution median of 17.4.

EV/EBITDA below its 5-year median

Southwest Gas's EV/EBITDA of 11.9 is below its 5-year median of 14.2.

P/B below the industry

Southwest Gas's price-to-book of 1.64 is below the Gas Production and Distribution median of 2.13.

Trading below fair value

The share price of $93.66 is below our fair value estimate of $129.09.

Margin of safety over 20%

The price is 27.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -26.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 228% over the last twelve months, against a 5-year average of 13.6% a year.

Growth against the industry

Needs revenue for this year and last.

Guidance issued

The latest outlook (2026 Adjusted earnings per share from continuing operations, Nov 4, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 14.1% over the last twelve months and averaged 4.5% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 4.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Southwest Gas's return on equity of 14.1% is above the Gas Production and Distribution median of 12.1%.

Earnings grew over 5 years

Net income grew 13.6% a year on average over the last five fiscal years.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

High debt

Debt is 85.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 108% five years ago to 85.1%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 12.7% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.12 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.96; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Southwest Gas paid dividends worth 2.7% of the share price over the last twelve months.

Yield below Treasuries

The 2.7% yield is below the 4.7% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Southwest Gas yields 2.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 33.1% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.