Southwest Gas Return On Equity vs. Price To Book
| SWX Stock | USD 78.30 0.23 0.29% |
Return On Equity | First Reported 2010-12-31 | Previous Quarter 0.0455853 | Current Value 0.0587 | Quarterly Volatility 0.15955122 |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 0.18 | 0.1876 |
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| Operating Profit Margin | 0.12 | 0.077 |
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For Southwest Gas profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Southwest Gas to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Southwest Gas Holdings utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Southwest Gas's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Southwest Gas Holdings over time as well as its relative position and ranking within its peers.
Southwest |
Southwest Gas' Revenue Breakdown by Earning Segment
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Is Gas Utilities space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Southwest Gas. If investors know Southwest will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Southwest Gas listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.90) | Dividend Share 2.48 | Earnings Share 2.51 | Revenue Per Share 72.578 | Quarterly Revenue Growth (0.08) |
The market value of Southwest Gas Holdings is measured differently than its book value, which is the value of Southwest that is recorded on the company's balance sheet. Investors also form their own opinion of Southwest Gas' value that differs from its market value or its book value, called intrinsic value, which is Southwest Gas' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Southwest Gas' market value can be influenced by many factors that don't directly affect Southwest Gas' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Southwest Gas' value and its price as these two are different measures arrived at by different means. Investors typically determine if Southwest Gas is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Southwest Gas' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Southwest Gas Holdings Price To Book vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Southwest Gas's current stock value. Our valuation model uses many indicators to compare Southwest Gas value to that of its competitors to determine the firm's financial worth. Southwest Gas Holdings is rated below average in return on equity category among its peers. It is rated third in price to book category among its peers fabricating about 30.94 of Price To Book per Return On Equity. At this time, Southwest Gas' Return On Equity is fairly stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Southwest Gas' earnings, one of the primary drivers of an investment's value.Southwest Price To Book vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Southwest Gas |
| = | 0.0524 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Price to Book (P/B) ratio is used to relate a company book value to its current market price. A high P/B ratio indicates that investors expect executives to generate more returns on their investments from a given set of assets. Book value is the accounting value of assets minus liabilities.
Southwest Gas |
| = | 1.62 X |
Price to Book ratio is mostly used in financial services industries where assets and liabilities are typically represented by dollars. Although low Price to Book ratio generally implies that the firm is undervalued, it is often a good indicator that the company may be in financial or managerial distress and should be investigated more carefully.
Southwest Price To Book Comparison
Southwest Gas is currently under evaluation in price to book category among its peers.
Southwest Gas Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Southwest Gas, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Southwest Gas will eventually generate negative long term returns. The profitability progress is the general direction of Southwest Gas' change in net profit over the period of time. It can combine multiple indicators of Southwest Gas, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -43.8 M | -46 M | |
| Operating Income | 418.3 M | 532.1 M | |
| Net Income | 150.9 M | 98.2 M | |
| Income Tax Expense | 41.8 M | 39.7 M | |
| Income Before Tax | 197.3 M | 138.9 M | |
| Total Other Income Expense Net | -221 M | -209.9 M | |
| Net Loss | -233.8 M | -222.1 M | |
| Net Loss | -195.7 M | -185.9 M | |
| Interest Income | 46.1 M | 43.8 M | |
| Net Interest Income | -249.4 M | -237 M | |
| Non Operating Income Net Other | -3.1 M | -3 M | |
| Change To Netincome | 437.6 M | 459.5 M | |
| Net Income Per Share | 2.13 | 1.39 | |
| Income Quality | 3.37 | 3.48 | |
| Net Income Per E B T | 0.76 | 0.55 |
Southwest Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Southwest Gas. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Southwest Gas position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Southwest Gas' important profitability drivers and their relationship over time.
Use Southwest Gas in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Southwest Gas position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southwest Gas will appreciate offsetting losses from the drop in the long position's value.Southwest Gas Pair Trading
Southwest Gas Holdings Pair Trading Analysis
The ability to find closely correlated positions to Southwest Gas could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Southwest Gas when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Southwest Gas - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Southwest Gas Holdings to buy it.
The correlation of Southwest Gas is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Southwest Gas moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Southwest Gas Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Southwest Gas can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Southwest Gas position
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Additional Tools for Southwest Stock Analysis
When running Southwest Gas' price analysis, check to measure Southwest Gas' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Southwest Gas is operating at the current time. Most of Southwest Gas' value examination focuses on studying past and present price action to predict the probability of Southwest Gas' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Southwest Gas' price. Additionally, you may evaluate how the addition of Southwest Gas to your portfolios can decrease your overall portfolio volatility.