Middlesex Water’s Poor Returns On Capital May Cause Investor Concerns
December 24, 2022
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Middlesex Water ($NASDAQ:MSEX) Company is a publicly traded water utility company based in New Jersey. It provides drinking water, wastewater and stormwater services to customers in the state of New Jersey and parts of Delaware.
However, recent investor concerns about Middlesex Water’s Returns On Capital (ROC) could be cause for worry. ROC measures the amount of return a company receives from the capital it has invested. Middlesex Water’s ROC has been steadily declining over the past five years. This is a worrying trend as it could indicate that the company is not making efficient use of its capital and that it may be unable to meet its financial goals. Another area of concern for investors is the company’s dividend payments. This could be an indication that the company is facing financial difficulties and is unable to sustain its dividend payments at the same level as before. The company’s declining ROC and reduced dividend payments could signal underlying financial issues and investors should take this into consideration when assessing their potential investments in the company.
Market Price
Middlesex Water has seen mostly positive media sentiment so far, but investors may be concerned about their poor returns on capital. On Tuesday, MIDDLESEX WATER stock opened at $87.0 and closed at $86.9, a drop of 1.0% from the previous closing price of 87.8. This indicates that the company is not doing well in terms of capital returns and could be a cause for investor concern. It provides retail and wholesale water and wastewater services to residential, commercial, industrial and public authority customers in New Jersey and Delaware. This indicates that the company is doing well in terms of its operations, but its returns on capital are not meeting investor expectations. The current market conditions have also put pressure on Middlesex Water’s stock price as investors are concerned about the company’s returns on capital. This is a cause for concern as investors may be looking for other investments with more potential for growth.
The company should look for ways to improve their capital returns in order to attract more investors and maintain their current ones. Middlesex Water needs to take steps to improve its returns on capital in order to attract more investors and maintain its current ones. The company should focus on improving its operations and increasing its efficiency while also looking for new ways to generate revenue. This could help the company to increase its returns on capital and provide better returns to its investors. With the right strategies, the company can improve its returns on capital and provide better returns to its investors. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Middlesex Water. More…
| Total Revenues | Net Income | Net Margin |
| 157.63 | 42.38 | 23.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Middlesex Water. More…
| Operations | Investing | Financing |
| 58.63 | -80.95 | 19.95 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Middlesex Water. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.06k | 664.51 | 22.69 |
Key Ratios Snapshot
Some of the financial key ratios for Middlesex Water are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 5.3% | 3.8% | 33.3% |
| FCF Margin | ROE | ROA |
| -16.1% | 8.3% | 3.1% |
VI Analysis
Company fundamentals are essential in determining a company’s long-term potential. VI App simplifies the analysis of a company’s fundamentals by providing a visual representation of the Star Chart. The Star Chart for Middlesex Water, for example, indicates that the company is strong in dividend, profitability and medium in asset and growth. Based on its fundamentals, Middlesex Water is classified as a ‘gorilla’. This is a type of company that has achieved stable and high revenue or earning growth due to its strong competitive advantage. Investors who are looking for a company with a good track record of performance and stable cash flows may be interested in Middlesex Water. Middlesex Water also has an intermediate health score of 5/10 with regard to its cashflows and debt. This implies that the company is likely to be able to sustain future operations in times of crisis. Thus, it is an attractive option for investors looking for stability and consistent returns. In conclusion, Middlesex Water is a strong option for investors looking for a company with a good track record and strong competitive advantage. Its intermediate health score makes it an attractive investment option that can sustain future operations even during times of crisis. More…
VI Peers
The company’s competitors include Artesian Resources Corp, The York Water Co, and American Water Works Co Inc.
– Artesian Resources Corp ($NASDAQ:ARTNA)
Artesian Resources Corp is a water utility company that serves the greater Baltimore and Wilmington areas. The company has a market cap of 494.09M as of 2022 and a Return on Equity of 10.87%. The company is engaged in the business of providing water and wastewater services to residential, commercial, and industrial customers.
– The York Water Co ($NASDAQ:YORW)
The York Water Company, founded in 1816, is the oldest investor-owned water utility in the United States. It is a water and wastewater utility company that serves approximately 70,000 customers in south central Pennsylvania. The company’s market capitalization is $634.16 million as of 2022, and its return on equity is 8.18%. The York Water Company is committed to providing safe, reliable, and affordable water and wastewater services to its customers.
– American Water Works Co Inc ($NYSE:AWK)
American Water Works Company, Inc. is the largest investor-owned water and wastewater utility company in the United States, based on operated revenue. The company provides water and wastewater services to an estimated 14 million people in 46 states. It has approximately 7,100 employees and operates 86 utility subsidiaries. The company’s headquarters is in Camden, New Jersey.
American Water Works Company’s market capitalization is $25.28 billion as of 2022. The company’s return on equity is 17.48%.
American Water Works Company provides water and wastewater services to residential, commercial, and industrial customers in the United States. The company also supplies water to public utilities and municipalities. In addition, it engages in the wastewater treatment, desalination, and water reuse businesses.
Summary
Investing in Middlesex Water can be a risky venture, given the company’s poor returns on capital. While the company has been able to consistently generate positive returns, these returns have not been as high as expected. This could be a sign of weak capital efficiency, which could be a cause for concern for investors.
Additionally, investors should consider the political landscape in which Middlesex Water operates. Regulatory changes in the water industry can have a major impact on the company’s financial performance. For example, changes to rate-making policies or environmental regulations could significantly increase costs and lower profits. Investors should also consider the company’s competitive landscape. Many of Middlesex Water’s competitors are larger and more established companies that have access to more capital and resources. This could put the company at a disadvantage in terms of competing for new business and customers. Finally, investors should take into account Middlesex Water’s debt load. While the company has relatively low debt levels when compared to its peers, its debt levels remain significant when measured against its equity levels. This could be a sign of financial distress and could lead to higher borrowing costs in the future. In conclusion, investing in Middlesex Water can be a risky proposition, given its poor returns on capital, potential regulatory changes, competitive landscape and debt load. Investors should consider all of these factors before making any investment decisions.
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