Middlesex Water Co (MSEX, Financial), a stalwart in the regulated utilities sector, has recently seen a significant uptick in its stock performance. With a current market capitalization of $1.07 billion and a stock price of $59.75, the company has experienced a 10.88% gain over the past week and an impressive 27.83% gain over the past three months. Despite these gains, the GF Value of $97.02 suggests a cautious approach, labeling the stock as a possible value trap.
Company Overview
Middlesex Water Co operates primarily in New Jersey, Delaware, and Pennsylvania, focusing on regulated water utility and wastewater systems. The company is divided into two segments: Regulated and Non-Regulated. The Regulated segment, which is the major revenue generator, deals with water distribution to various consumer bases, while the Non-Regulated segment manages contract services for private water and wastewater systems. This strategic division allows Middlesex to maintain a steady revenue stream, predominantly from residential customers.
Profitability Insights
Middlesex Water Co boasts a Profitability Rank of 8/10, indicating robust financial health. The company's operating margin stands at 24.67%, outperforming 78.29% of its peers in the industry. Additionally, its Return on Equity (ROE) of 8.67% and Return on Assets (ROA) of 3.05% further demonstrate its efficiency in managing shareholder equity and assets, respectively. The Return on Invested Capital (ROIC) of 3.43% also highlights its capability to generate cash relative to the capital invested. Impressively, Middlesex has maintained profitability for the past decade, surpassing 99.8% of its competitors.
Growth Trajectory
The company's Growth Rank is an impressive 9/10. Over the past three years, Middlesex has achieved a revenue growth rate per share of 5.00%, and over five years, a rate of 2.80%. Looking ahead, the estimated total revenue growth rate for the next three to five years is a promising 9.06%. However, the EPS growth rates present a mixed picture, with a 3-year rate of -6.90% and a 5-year rate of -1.20%. Despite these figures, the future EPS growth rate is expected to rebound to 11.73%, indicating potential for substantial earnings improvement.
Investor Interest
Notable investors in Middlesex Water Co include Jim Simons, holding 284,700 shares, Paul Tudor Jones (Trades, Portfolio) with 15,082 shares, and Joel Greenblatt (Trades, Portfolio) who owns 4,917 shares. Their investments underscore the company's appeal to savvy market players, reflecting confidence in its financial structure and future prospects.
Competitive Landscape
When compared to its competitors, Middlesex Water Co holds a strong position. The York Water Co (YORW, Financial) has a market cap of $570.986 million, Aris Water Solutions Inc (ARIS, Financial) is valued at $498.845 million, and Consolidated Water Co Ltd (CWCO, Financial) at $425.165 million. Middlesex's larger market cap suggests a dominant presence and possibly greater resources for sustained growth and operational expansion.
Conclusion
In conclusion, Middlesex Water Co's recent stock performance is backed by solid profitability metrics and promising growth prospects. Despite the caution suggested by the GF Value, the company's operational success and strategic market positioning continue to attract investor interest. With a robust competitive stance and a clear growth trajectory, Middlesex Water Co remains a significant player in the regulated utilities industry, poised for future success.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
