Fact based stock research
Southwest Gas (NYSE:SWX)

US8448951025

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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.

Southwest Gas stock research in summary

swgasholdings.com

ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Southwest Gas (Gas Utilities, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Southwest Gas are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 70, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Southwest Gas's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Southwest Gas exhibits low value (Obermatt Value Rank of 43), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 70) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	43
Growth Rank	57
Safety Rank	70
Combined Rank	67

Country	USA
Industry	Gas Utilities
Index	Customer Focus US, S&P MIDCAP
Size class	X-Large

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

Further information

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

Research History: Southwest Gas

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	100	67	43
GROWTH
GROWTH	15	29	45	57
SAFETY
SAFETY	21	80	60	70
SENTIMENT
SENTIMENT	n/a	21	43	^new
360° VIEW
360° VIEW	n/a	69	58	^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 Southwest Gas is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	100	67	43
GROWTH
GROWTH	15	29	45	57
SAFETY
SAFETY	21	80	60	70
COMBINED
COMBINED	13	86	73	67

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Southwest Gas shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Southwest Gas. Price-to-Sales (P/S) is 89, which means that the stock price compared with what market professionals expect for future sales is lower than 89% of comparable companies, indicating a good value concerning to Southwest Gas's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 28, meaning that dividends are expected to be lower than for 72% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 52% of alternatives (only 48% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 99% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Southwest Gas's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Southwest Gas could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Southwest Gas looks like an expensive investment today. 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 especially important 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)	65	96	89	89
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	34	89	13	1
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	50	97	74	48
DIVIDEND YIELD
DIVIDEND YIELD	56	65	49	28
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	53	100	67	43

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Southwest Gas 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, with half of the indicators below and half above average for Southwest Gas. Sales Growth has a rank of 92 which means that currently professionals expect the company to grow more than 92% of its competitors. Stock Returns are also above average with a rank of 92. But Capital Growth has only a rank of 39, which means that currently professionals expect the company to grow its invested capital less than 61% of its competitors. Profit Growth is also low, with a rank of only 8, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 92% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. 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	27	96	4	92
PROFIT GROWTH
PROFIT GROWTH	21	19	89	8
CAPITAL GROWTH
CAPITAL GROWTH	n/a	13	17	39
STOCK RETURNS
STOCK RETURNS	38	39	87	92
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	15	29	45	57

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Southwest Gas has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Southwest Gas is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Southwest Gas and the other two below average. Refinancing is at 96, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 96% of its competitors. But Leverage is high with a rank of 44, meaning the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. Liquidity is also on the riskier side with a rank of 44, meaning the company generates less profit to service its debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Southwest Gas has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Southwest Gas are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Southwest Gas 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	12	76	12	44
REFINANCING
REFINANCING	80	86	98	96
LIQUIDITY
LIQUIDITY	15	62	53	44
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	80	60	70

Last update of Safety Rank: 21-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Southwest Gas 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	28	62	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	75	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	29	12	^new
MARKET PULSE
MARKET PULSE	n/a	52	54	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	21	43	^new

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