2. Company Structure
● Three companies
● SJW Corp (88% Op Rev.)
● Superior quality water systems
● Based in San Jose metro area
● Vertically integrated business model
● Multiple sources of water
● SJW Land Company (8% Op Rev.)
● Owns undeveloped land and commercial buildings
● SJWTX ( 4% Op Rev.)
Company Overview | Financials | Industry | Projects | Risks | Outlook
3. Income Statement
Company Overview | Financials | Industry | Projects | Risks | Outlook
In Thousands of USD (except
for per share items)
12 months ending
2015-12-31
12 months ending
2014-12-31
12 months ending
2013-12-31
12 months ending
2012-12-31
Revenue
305,082 319,668 276,869 261,547
Gross Profit
305,082 319,668 276,869 261,547
Operation Expenses
225,122 226,790 223,462 206,250
Operating Income
79,960 92,878 53,407 55,297
Interest Expense
(18,806) (16,101) (16,888) (17,437)
Income Before Income Tax
61,154 76,777 36,519 37,860
Provision for Income Tax
23,272 24,971 14,135 15,542
Net Income
37,882 51,806 22,384 22,318
Dividends Paid
15,885 15,177 14,443 13,231
4. Balance Sheet
In Thousands of USD (except for per share items) As of 2015-12-31 As of 2014-12-31
Cash & Equivalents 5,239 2,399
Receivables 16,390 14,997
Total Current Assets 73,376 68,093
Property, plant & equipment 1,036,763 963,014
Accumulated Depreciation (65,000) (60,000)
Total Assets 1,340,963 1,269,304
Accounts Payable 16,196 7,001
Long term Debt 380,825 384,365
Deferred Taxes 198,775 185,506
Other Long term Liabilities 9,961 8,592
Total Debt 384,316 384,949
Additional Paid in Capital 68,636 66,298
Retained Earnings 302,220 290,773
Total Stockholders Equity 383,783 360,155
Total Liabilities & Shareholders' Equity 1,340,963 1,269,304
Company Overview | Financials | Industry | Projects | Risks | OutlookCompany Overview | Financials | Industry | Projects | Risks | Outlook
5. In Thousands of USD (except for
per share items)
12 months ending 2015-12-
31
12 months ending 2014-12-
31
12 months ending 2013-12-
31
Net Income 37,882 51,806 22,384
Depreciation 42,330 39,491 36,595
Deferred Taxes 15,925 26,067 11,567
Cash from Operating Activities 97,257 65,911 63,425
Cash Flows from Investing
Activities (14,000) (14,000) (9,000)
Debt Repayment 0 (528) (19)
Cash Dividends Paid (15,885) (15,177) (14,443)
Common Stock Issued 0 0 35,894
Cash from Financing Activities (16,193) (31,829) (32,122)
Net Change in Cash 2,840 100 (223)
Cash Flow Statements
Company Overview | Financials | Industry | Projects | Risks | Outlook
6. Industry
● Government regulation
● Economic and financial stability
● Barriers to entry
Infrastructure/capital turnover
● Equipment and plants become outdated periodically
Increasing water scarcity
● R&D into accessing water sources and recycling water
Company Overview | Financials | Industry | Projects | Risks | Outlook
7. Company Name Ticker Price P/E EPS
Mkt
Cap
Div.
Yield
Beta
SJW Corp. SJW 32.77 18.42 1.78 675M 2.39% 0.26
Aqua America Inc WTR 31.83 27.46 1.16 5.64B 2.18% 0.54
Middlesex Water
Company MSEX 35.23 27.27 1.29 575M 2.16% 0.53
American States Water
Co AWR 38.70 24.70 1.57 1.41B 2.24% 0.41
American Water AWK 73.33 27.56 2.66 13B 1.87% 0.23
California Water
Service Group CWT 27.64 31.06 0.89 1.33B 2.41% 0.66
York Water YORW 26.85 27.68 0.97 350M 2.11% 0.60
Artesian Resources
Corp. ARTNA 26.26 20.37 1.29 250M 3.28% -0.06
Connecticut Water
Services Inc CTWS 46.62 22.86 2.04 525M 2.30% 0.16
Company Overview | Financials | Industry | Projects | Risks | Outlook
8. Key Statistics
Company Name
Ticker Symbol
Price/Sales
Ratio
Price/Book
Ratio
Enterprise
Value/Revenue
Ratio
Enterprise
Value/EBITDA
Ratio
SJW 2.29 1.82 3.65 9.16
WTR 7.12 3.30 9.32 16.77
MSEX 4.71 2.88 5.77 14.55
AWR 3.22 3.11 4.01 11.56
AWK 4.17 2.63 6.26 13.10
CWT 2.35 2.18 3.32 12.45
YORW 8.02 3.43 9.81 15.97
ARTNA 3.23 1.87 4.65 10.39
CTWS 5.63 2.43 7.70 18.68
Company Overview | Financials | Industry | Projects | Risks | Outlook
9. Projects
● Texas water supply project
● Expanding to central Texas community
● Reincorporated from California to Delaware
● Decrease in corporate taxes
● Purifying Wastewater project
Company Overview | Financials | Industry | Projects | Risks | Outlook
10. Risks
● Regulatory Environment
● Water rates set by gov’t agencies
● Contamination of water sources
● Drought
● Gov’t sets water rates
● Higher expenses + Same rates = Lower Net Income
Company Overview | Financials | Industry | Projects | Risks | Outlook
11. Why now?
● All signals show that the company is
undervalued
● Future of water industry is bright
● Analysts bullish on SJW compared to
industry
● Ongoing projects to expand
● Stable Financials
● Consistent dividends
Company Overview | Financials | Industry | Projects | Risks | Outlook
12. Big Picture &
Recommendation● We recommend an
investment of $1500
Company Overview | Financials | Industry | Projects | Risks | Outlook
Ticker Amount Beta Industry
DIS $1,798.74 1.44 Entertainment
PYPL $1,640.52 1.14 Credit Services
CHAD $1,282.12 N/A China
FSLR $970.20 2.19 Solar
WY $1,564.68 1.39 Lumber
SJW $1,500 0.27 Water
Cash $1,696.30 N/A N/A
HT Portfolio
DIS PYPL CHAD FSLR WY SJW Cash
