Artesian Resources Corp (NASDAQ: ARTNA)

Sector: Utilities Industry: Utilities - Regulated Water CIK: 0000863110
Market Cap 313.17 Mn
P/B 1.89
P/E 18.64
P/S 3.58
ROIC (Qtr) 6.15
Div Yield % 3.95
Rev 1y % (Qtr) 4.63
Total Debt (Qtr) 177.63 Mn
Debt/Equity (Qtr) 0.71
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About

Artesian Resources Corp, or ARTNA, operates in the water and wastewater services industry, providing essential utilities to a diverse customer base in Delaware, Maryland, and Pennsylvania. The company's main business activities include the distribution and sale of water to various customers, as well as the provision of wastewater services in Delaware. Artesian Water, the company's principal subsidiary, is the oldest and largest investor-owned public water utility on the Delmarva Peninsula, serving over 79,000 metered customers. The company's revenue...

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Investment thesis

Bull case

  • Strong tangible asset base of 831.97M provides 4.68x coverage of total debt 177.63M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 36.58M provides strong 183.83x coverage of stock compensation 199000, indicating sustainable incentive practices.
  • Tangible assets of 831.97M provide robust 58.63x coverage of other current liabilities 14.19M, indicating strong asset backing.
  • Operating cash flow of 36.58M provides solid 1.26x coverage of current liabilities 28.97M, showing strong operational health.
  • Operating cash flow of 36.58M provides strong 9.05x coverage of inventory 4.04M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 36.58M barely covers its investment activities of (55.40M), with a coverage ratio of -0.66, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 705000 against inventory of 4.04M, the 0.17 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 36.58M provides thin coverage of dividend payments of (12.54M) with a -2.92 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 10.73M relative to inventory of 4.04M (2.66 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (18.82M) provides weak coverage of capital expenditures of 55.40M, with a -0.34 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2024)

Regulation Status Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Regulated Water
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AWK American Water Works Company, Inc. 24.13 Bn 37.82 6.54 15.37 Bn
2 WTRG Essential Utilities, Inc. 6.86 Bn 45.52 9.97 7.98 Bn
3 AWR American States Water Co 2.79 Bn 47.69 6.18 0.92 Bn
4 CWT California Water Service Group 2.22 Bn 43.86 3.64 1.52 Bn
5 HTO H2O America 1.79 Bn 19.00 2.39 1.90 Bn
6 MSEX Middlesex Water Co 0.99 Bn 22.76 5.03 0.41 Bn
7 CWCO Consolidated Water Co. Ltd. 0.54 Bn 88.40 10.18 0.00 Bn
8 YORW York Water Co 0.47 Bn 23.81 7.76 0.23 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.57 1.15
EV to Cash from Ops. EV/CFO 23.58 23.08
EV to Debt EV to Debt 2.66 18.00
EV to EBIT EV/EBIT 15.70 23.85
EV to EBITDA EV/EBITDA 12.17 16.61
EV to Free Cash Flow [EV/FCF] EV/FCF -24.58 -20.94
EV to Market Cap EV to Market Cap 1.51 1.32
EV to Revenue EV/Rev 5.41 9.58
Price to Book Value [P/B] P/B 1.89 4.93
Price to Earnings [P/E] P/E 18.64 38.23
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.80 0.89
Dividend Payout Ratio % Div Payout % (Qtr) 55.60 56.90
Dividend per Basic Share Div per Share (Qtr) 1.22 1.13
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -66.74 -14.77
Interest Coverage Int. cover (Qtr) 4.47 279.41
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -26.98 -66.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -93.41 15.05
Dividend Growth (1y) % Div 1y % (Qtr) 4.10 6.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 9.74 -2.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.08 0.44
EBIT Growth (1y) % EBIT 1y % (Qtr) 8.84 -4.60
EBT Growth (1y) % EBT 1y % (Qtr) 11.58 -5.63
EPS Growth (1y) % EPS 1y % (Qtr) 12.31 -4.34
FCF Growth (1y) % FCF 1y % (Qtr) -275.08 -313.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.08 349.72
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.13 0.18
Cash Payout Ratio Cash Payout (Qtr) 0.14 0.04
Cash Ratio Cash Ratio (Qtr) 0.02 0.68
Current Ratio Curr Ratio (Qtr) 0.68 1.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.71 1.08
Interest Cover Ratio Int Coverage (Qtr) 4.47 279.41
Times Interest Earned Times Interest Earned (Qtr) 4.47 279.41
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 47.30 31.76
EBIT Margin % EBIT Margin % (Qtr) 34.99 17.86
EBT Margin % EBT Margin % (Qtr) 27.15 6.26
Gross Margin % Gross Margin % (Qtr) 44.00 53.31
Net Profit Margin % Net Margin % (Qtr) 20.20 2.23