Artesian Resources Corp. – Value Analysis (NASDAQ:ARTNA) : June 6, 2017

Capitalcube gives Artesian Resources Corp. a score of 53.

Our analysis is based on comparing Artesian Resources Corp. with the following peers – York Water Company, Middlesex Water Company, Cadiz Inc., Aqua America, Inc., Connecticut Water Service, Inc., SJW Group, American States Water Company, California Water Service Group and American Water Works Company, Inc. (YORW-US, MSEX-US, CDZI-US, WTR-US, CTWS-US, SJW-US, AWR-US, CWT-US and AWK-US).

Investment Outlook

Artesian Resources Corp. has a fundamental score of 53 and has a relative valuation of UNDERVALUED.

Fundamental Score

Access our research and ratings on Artesian Resources Corp.

Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It’s current Price/Book of 2.20 is about median in its peer group.
  • The market expects ARTNA-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • ARTNA-US‘s relative asset efficiency and net profit margins are both around the median level.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • ARTNA-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • ARTNA-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • ARTNA-US has additional debt capacity.

Access our research and ratings on Artesian Resources Corp.

Leverage & Liquidity

ARTNA-US has additional debt capacity.

  • With debt at a reasonable 27.44% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 26.87%), and a well-cushioned interest coverage level of 4.22x, ARTNA-US has the capacity to borrow some more.
  • All 9 peers for the company have an outstanding debt balance.

ARTNA-US has maintained its relatively high liquidity profile from the recent year-end.

  • ARTNA-US‘s interest coverage is its highest relative to the last five years and compares to a low of 2.85x in 2013.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (4.22x) and the peer median (4.13x).
  • ARTNA-US‘s debt-EV is its lowest relative to the last five years and compares to a high of 38.30% in 2014.
  • Though its debt-EV has remained relatively stable at 27.44% compared to 2016, its peer median has decreased to 26.87% from 27.40% during this period.

Access the detailed analysis for Artesian Resources Corp.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
York Water Company 15.85 1.11 4.1 24.53
Middlesex Water Company 20.74 0.55 7.54 25.5
Cadiz Inc. 26.29 3.28 -0.8 -8.29
Aqua America, Inc. 25.42 0.44 3.94 20.6
Connecticut Water Service, Inc. 28.64 0.58 4.49 15.46
SJW Group 30.64 1.45 4.16 21.35
American States Water Company 20.47 1.08 5.31 32.67
California Water Service Group 28.69 0.44 3.01 22.45
American Water Works Company, Inc. 34.75 0.32 3.28 17.82
Artesian Resources Corporation Class A 27.44 0.28 4.22 25.53
Peer Median 26.87 0.56 4.13 21.9
Best In Class 15.85 3.28 7.54 32.67

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Company Profile

Artesian Resources Corp. is a holding company, which engages in the provision of water resource management. Its activities include residential, commercial water and wastewater, government and contract services, and developers. The company was founded in 1927 and is headquartered in Newark, DE.


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