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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Middlesex Water Company (XNAS:MSEX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MSEX
Name:
MIDDLESEX WATER COMPANY (XNAS:MSEX)
Sector:
- 2656.00K
Industry:
Utilities�Regulated Water
CEO:
Mr. Dennis Doll
Total Employees:
347
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -71.45% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MIDDLESEX WATER COMPANY(MSEX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED WATER INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
89.21
One Month Price Target:
$89.49
Six Month Price Target :
$90.91
Likely Price in One Year's Time:
Ticker:
$92.61
Likely Trading Range Today Under (Normal Volatility)
$88.91
Price Upper limit ($) :
$89.64
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$84.87
This week:
$79.49
This month :
$69.78
Other Primary facts
Market Cap:
1.57B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
17.61M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.06%
-10.97%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$109.36
$100.05
$69.06
$78.37
Medium risk (<10%) entry points
Buy Call
Sell Call
$97.01
Buy Put:
Sell Put:
$95.03
$81.38
$83.39
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MSEX
Sharpe Ratio:
2.81%
Comparison:
MSEX, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 68.30% higher than the industry
& ratio is 23.27% higher than the market/S&P 500 average
Average Returns/Yield of
MSEX
Daily returns:
0.08%
Weekly returns:
0.38%
Monthly returns:
1.53%
Yearly returns:
11.13%
Comparison of returns:
Average annual returns/yield (last 3 years) is 65.04% above industry average
Classification:
MSEX, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.22
Statistical test of Returns:
MSEX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.41%
Weekly Volatility:
5.39%
Monthly Volatility:
10.77%
Yearly Volatility:
37.31%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.57%
Volatility in last five trading days has been -76.22% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.87%
Weekly VaR:
-10.89%
Monthly VaR:
-21.78%
How Much Can the price of
MSEX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-75.45%
This translates to price declining to:
$72.81
This translates to price declining to:
$21.90
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MSEX is a 53.73% riskier investment compared to the market/S&P 500 & is 31.70% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 6.44% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MSEX
Beta in relation to market/S&P 500--0.57
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.297
Beta in relation to Nasdaq (XNAS):
0.494
Beta in relation to all global stocks::
0.77
Beta Comparison & Analysis
Beta of competitors/peers::
0.43
Beta is 32.02% higher than peers
Average Industry Beta:
0.545
Beta is 4.11% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.62%
Sustainable growth rate is -22.72% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.113
Alpha is 166.90% above industry average alpha yield
Alpha is 721% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MSEX
Equity cost of capital:
0.070
Equity cost of capital is 2.23% above industry mean WACC
Unlevered (without debt) cost of capital:
3.69%
Before-tax cost of debt:
2.47%
After-tax cost of debt:
1.95%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.95%
WACC is -8.92% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.34
Revenue growth rate per share of (3Y):
4.13
Annual revenue growth rate is -113.47% below industry average
EPS:
$2.36
Expected Annual growth rate of EPS (3Y):
0.82%
Expected future EPS growth rate is -93.28% lower than the Utilities�Regulated Water industry
Free cash flow (FCF) per share:
$2.37
Balance sheet equity growth per share: 20.50%
Equity growth rate per share is -3.32% lower than the industry
Debt per share
$17.64
EBITDA per share
$4.15
Valuation Analysis Today of
MSEX
P/E Ratio:
39.83
P/E Ratio of Competitors/Peers:
34.75
P/E ratio is 14.62% higher than main peers & is 42.23% higher than the industry
Stock price/value with industry average P/E ratio: $66.09
MSEX is 34.99% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $39.24
Present value of the expected future dividends only: $19.97
P/S (Price to Sales ratio):
10.7
Price to sales ratio is 19.88% above the industry mean
P/B (Price to book value ratio):
4.13
Price to free cash flow: 37.60
-
Net income growth rate (3Y):
5.58%
Net income growth rate is -89.51% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.26%
Dividend yeild: 1.30%
Previous Dividend: $0.29
Previous adjusted dividend: $0.29
Previous Dividend: $1.16
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.28
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: 1.16%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 19/07/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 20/04/2022
Dividend History:
2022-05-12--$0.29
2021-11-15--$0.29
2021-08-12--$0.27
2022-02-11--$0.29
2021-11-10--$0.29
2021-05-13--$0.27
Dividend growth rate is -85.19% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
81.78%
Net debt to equity ratio:
86.62%
Debt to assets ratio:
30.78%
Net debt to assets ratio:
32.60%
Debt-to-asset ratio is -58.07% below industry average
Ability to repay debt:
Interest coverage ratio:
8.89
Interest coverage ratio is 244.47% more than industry average
Looking forward:
Debt growth rate:
11.12%
Annual debt growth is 18% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.39%
Analysis of Key Statistics
Correlation of price movement with the market:
0.434
Statistical significance of correlation:
MSEX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.56
Stock price is -22.49% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.56
Correlation of price movement with Nasdaq (^IXIC):
-0.001
Covariance of price movement with the market:
-0.001
Kurtosis
18.213
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.47
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
MSEX
Gross Profit Margin Ratio:
197%
Operating Profit Margin Ratio:
23.75%
Operating profit margin is -4.22% lower than the industry
Net Profit Margin Ratio:
197%
Effective Tax Rate:
-11.15%
Effective tax rate is -195.10% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.98%
Return on equity (ROE) is 4.52% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.13%
Return on assets (ROA) is 22.71% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
0.55
Current ratio is -20.00% below industry average
Cash Conversion Cycle (days):
-100.5
Cash conversion cycle is -191.15% below industry average
The remaining useful life of property plant & equipment is: 22.3 years
Stock based compensation to net income ratio:
0.64%
In-depth Efficiency Analysis
Revenue generated per employee:
423.0K
Each employee generates -22% less revenue than industry average revenue per employee
EBITDA generated per employee:
210.7K
Each employee generates -28% less EBITDA than industry average revenue per employee
Profit generated per employee:
120.3K
Each employee generates -22% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.7K
Each employee generates -7% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.8M
Each employee generates -7% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MSEX
Otter Tail Corporation (XNAS:OTTR)
THE YORK WATER COMPANY (XNAS:YORW)
CADIZ INC. (XNAS:CDZI)
ARTESIAN RESOURCES CORPORATION (XNAS:ARTNA)
GLOBAL WATER RESOURCES, INC. (XNAS:GWRS)
SPKE
IPLDP
Pure Cycle Corporation (XNAS:PCYO)
CONSOLIDATED WATER CO. LTD. (XNAS:CWCO)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
146.80M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
74.45M
72.34M
-
-
-
-
37.47M
37.47M
-
8.23M
27.33M
73.10M
34.87M
41.74M
37.55M
- 4187.00K
41.74M
Statement of Cash Flow
Date:
Period:
6.83M
Differed Income Tax :
- 2137.00K
Stock Based Compensation :
267.00K
Change in Working Capital :
2.17M
Accounts Receivables:
1.83M
Other Working Capital:
- 1400.00K
Other Non-Cash Items:
- 5247.00K
Net Cash Provided by Operating Activities:
13.98M
Investments in PP&E:
-
Net Acquisitions:
3.12M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.29M
-
3.29M
21.63M
5.37M
2.57M
32.87M
862.37M
-
-
-
-
114.35M
976.72M
-
1.01B
18.06M
21.71M
14.03M
1.32M
18.58M
59.67M
310.72M
164.22M
569.95M
-
629.62M
225.09M
152.79M
-
-
March 31, 2022 at 6:00:00 AM
111.93M
379.97M
1.01B
-
332.43M
329.1M
-
- 16631.00K
- 13509.00K
- 1228.00K
2.91M
-
- 5117.00K
2.73M
- 705.00K
-
- 239.00K
3.29M
3.53M
13.98M
- 16631.00K
- 2656.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MSEX
2023
2024
2025
2026
2027
$102.24
$106.14
$110.19
$114.39
$118.75