Fact based stock research
California Water Service (NYSE:CWT)

US1307881029

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

California Water Service stock research in summary

calwatergroup.com

ANALYSIS: With an Obermatt Combined Rank of 52 (better than 52% compared with investment alternatives), California Water Service (Water Utilities, USA) shares have above-average financial characteristics compared with similar stocks. Shares of California Water Service are low in value (priced high) with a consolidated Value Rank of 38 (worse than 62% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 55). ...read more

RECOMMENDATION: A Combined Rank of 52, is a buy recommendation based on California Water Service's financial characteristics. As the company California Water Service shows low value with an Obermatt Value Rank of 38 (62% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 55% of comparable companies (Obermatt Growth Rank is 55). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for California Water Service, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	38
Growth Rank	55
Safety Rank	49
Combined Rank	52

Country	USA
Industry	Water Utilities
Index
Size class	Medium

21-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: California Water Service

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	19	28	38
GROWTH
GROWTH	28	17	29	55
SAFETY
SAFETY	23	83	75	49
SENTIMENT
SENTIMENT	n/a	10	10	^new
360° VIEW
360° VIEW	n/a	7	8	^new

Most recent update of the stock research: 21-Mar-2024. Financial reporting date used for calculating ranks: 30-Sep-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better California Water Service is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	19	28	38
GROWTH
GROWTH	28	17	29	55
SAFETY
SAFETY	23	83	75	49
COMBINED
COMBINED	3	32	28	52

Last update of combined financial performance: 21-Mar-2024. Stock analysis on combined financial performance: The higher the rank of California Water Service the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), California Water Service shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for California Water Service. Price-to-Sales is 29 which means that the stock price compared with what market professionals expect for future profits is higher than 71% of comparable companies, indicating a low value concerning California Water Service's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 45, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of California Water Service. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 31 and Dividend Yield, which is lower than 70% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a hold recommendation based on California Water Service's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for California Water Service? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as California Water Service? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. California Water Service may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	3	22	23	29
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	21	25	27	31
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	19	25	42	45
DIVIDEND YIELD
DIVIDEND YIELD	38	19	22	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	9	19	28	38

Last update of Value Rank: 21-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of California Water Service; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), California Water Service shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for California Water Service. Profit Growth, with a rank of 100 (better than 100% of its competitors), and Capital Growth, with a rank of 57, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors, and Stock Returns are at a rank of 29. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	24	44	67	16
PROFIT GROWTH
PROFIT GROWTH	83	23	33	100
CAPITAL GROWTH
CAPITAL GROWTH	n/a	27	63	57
STOCK RETURNS
STOCK RETURNS	66	49	25	29
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	28	17	29	55

Last update of Growth Rank: 21-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of California Water Service.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company California Water Service has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of California Water Service is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for California Water Service and the other two below average. Leverage is at a rank of 88 meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors.Refinancing is at a rank of 43, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 57% of its competitors. Liquidity is at a rank of 13, meaning that the company generates less profit to service its debt than 87% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), California Water Service has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of California Water Service are on the safer side. Investors may have a short-term debt challenge and liquidity issues with California Water Service and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	59	50	88	88
REFINANCING
REFINANCING	39	75	55	43
LIQUIDITY
LIQUIDITY	16	73	51	13
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23	83	75	49

Last update of Safety Rank: 21-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of California Water Service and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	13	27	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	21	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	55	24	^new
MARKET PULSE
MARKET PULSE	n/a	1	35	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	10	10	^new

Last update of Sentiment Rank: 21-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for California Water Service.
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