Southwest Gas to Spinoff Centuri for IPO in 2024
December 17, 2023
🌥️Trending News
The company operates in four states: Arizona, Nevada, New Mexico, and Utah. Recently, Southwest Gas ($NYSE:SWX) announced plans to spinoff its subsidiary Centuri in an initial public offering (IPO) to be held in the spring or summer of 2024. Centuri is a leading provider of construction, maintenance, and engineering services for natural gas and electric utility infrastructure. With the planned IPO, Centuri will become an independent publicly-traded company, allowing investors to purchase shares in the company and have a stake in its future success. The spinoff of Centuri is part of Southwest Gas’ strategic plan to strengthen its core business and create value for its shareholders.
Through this move, Southwest Gas will be able to expand its operations without being weighed down by Centuri’s operations. This will allow both companies to focus on their specific goals and objectives, while continuing to benefit from the strong relationship between them. By the time of the IPO, Centuri will have built an established track record and become an attractive investment opportunity for potential investors.
Price History
On Monday, SOUTHWEST GAS stock opened at $60.1 and closed at $61.0, up by 1.1% from its previous closing price of $60.3. The increase can be attributed to the news of SOUTHWEST GAS announcing its decision to spinoff Centuri for an IPO in 2024. Centuri is a subsidiary of SOUTHWEST GAS and is one of the largest pipeline infrastructure companies in the United States and Canada.
As part of the spinoff, SOUTHWEST GAS will receive a full ownership interest in Centuri, as well as a payment from Centuri. This news has caused investors to be bullish on SOUTHWEST GAS stock, resulting in the increase in its stock price. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Southwest Gas. More…
| Total Revenues | Net Income | Net Margin |
| 5.49k | -202.56 | 3.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Southwest Gas. More…
| Operations | Investing | Financing |
| 302.54 | 122.26 | -495.08 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Southwest Gas. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 11.84k | 8.45k | 45.29 |
Key Ratios Snapshot
Some of the financial key ratios for Southwest Gas are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 19.3% | 8.3% | 0.7% |
| FCF Margin | ROE | ROA |
| -11.1% | 0.7% | 0.2% |
Analysis
GoodWhale has conducted an analysis of the financials of SOUTHWEST GAS. According to our Star Chart system, SOUTHWEST GAS is classified as a ‘cheetah’, which means it achieved high revenue or earnings growth but is considered less stable due to lower profitability. We can conclude that investors looking for high-growth stocks may be interested in this company. In terms of financial health, SOUTHWEST GAS has an intermediate score of 4/10, which suggests that it might be able to sustain future operations in times of crisis. In terms of other financial metrics, SOUTHWEST GAS is strong in asset, dividend, growth, and medium in profitability. Ultimately, SOUTHWEST GAS should be evaluated on a case-by-case basis according to the investor’s objectives. More…
Peers
The energy industry is highly competitive, and Southwest Gas Holdings Inc is no exception. It competes with some of the largest energy companies in the world, such as Snam SpA, Amber Grid AB, and Korea Gas Corp. Each of these companies has a unique set of strengths and weaknesses that can help them gain an edge in the market, and Southwest Gas Holdings Inc must be prepared to face off against these formidable opponents.
– Snam SpA ($LTS:0NQP)
Snam SpA is an Italian energy company focusing on natural gas infrastructure, energy services, and energy efficiency. The company has a market capitalization of 16.44 billion as of 2022, and its Return on Equity (ROE) is 13.61%. This suggests that the company is generating a high return on its investments compared to its peers, which is a positive indicator of its financial health. The company has a strong presence in the European energy market, and is well-positioned to capitalize on the increasing demand for natural gas.
– Amber Grid AB ($LTS:0QGQ)
Amber Grid AB is a Lithuanian natural gas transmission system operator. The company operates a natural gas transmission, distribution and storage system in Lithuania and Latvia, as well as a network for international transit of natural gas. As of 2022, the company has a market capitalization of 223.87M and a Return on Equity of 7.82%. This gives investors an indication of the company’s financial performance, as well as its ability to generate profits from its current operations. Amber Grid AB is a reliable provider of natural gas transmission, distribution and storage services in the Baltic region.
– Korea Gas Corp ($KOSE:036460)
Korea Gas Corporation (KOGAS) is the world’s largest liquefied natural gas (LNG) importer and Korea’s largest natural gas utility company. With a market cap of 2.98 trillion as of 2022, KOGAS is one of the major players in the global gas industry. Furthermore, KOGAS has an impressive Return on Equity (ROE) of 17.22%, which indicates its ability to generate profits from its shareholders’ investments. This is largely due to KOGAS’ strong financial position, allowing it to make investments in its LNG infrastructure, expand production capacity and increase its customer base. KOGAS is a leader in the LNG industry, and its impressive market cap and ROE make it a strong player in the energy sector.
Summary
Southwest Gas is considering a spinoff of its Centuri business unit, a provider of comprehensive pipeline services and solutions for the natural gas industry. The proposed initial public offering (IPO) is expected to take place in spring or summer 2024, subject to market conditions and other factors. This move will allow Southwest Gas to focus on core operations and expand its portfolio of natural gas and electric services.
The IPO will provide investors with an opportunity to gain exposure to the natural gas industry while taking advantage of the potential upside of Centuri’s growth. Analysts suggest that this will be a beneficial move for both Southwest Gas and Centuri, allowing each entity to maximize their potential within the natural gas sector.
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