Is SJW Group (NASDAQ:SJW) a High Quality Stock Based on Its ROE?
Generated by AI AgentMarcus Lee
Sunday, Jan 19, 2025 7:47 am ET1min read
SJW--
SJW Group (NASDAQ:SJW), a water utility company, has a return on equity (ROE) of 7.08% as of January 2025 (TTM). This article will analyze the company's ROE, compare it to its peers and industry averages, and discuss the primary drivers of its ROE to determine if SJW Group is a high-quality stock.
SJW Group's ROE Compared to Peers and Industry Averages
SJW Group's ROE of 7.08% is lower than the average ROE of its peers and industry averages. Compared to its peers, SJW Group's ROE is less than California Water Service Group (13.27%), Artesian Resources Corporation (8.57%), The York Water Company (9.44%), American States Water Company (13.53%), Middlesex Water Company (9.53%), Consolidated Water Co. Ltd. (18.42%), and Essential Utilities, Inc. (8.98%). Additionally, SJW Group's ROE is less than the average ROE of the last 4 quarters (1.75%) and the 3-year, 5-year, and 10-year historical averages (6.46%, 5.74%, and 8.26%, respectively).
Primary Drivers of SJW Group's ROE and Sustainability
SJW Group's return on equity (ROE) is primarily driven by its ability to generate profits from shareholders' equity. The company's ROE has shown a gradual improvement over the past five years, indicating that it has become more efficient in utilizing its shareholders' equity to generate earnings. This improvement suggests effective management of assets and liabilities, as well as successful operational performance. However, the ROE values are relatively moderate compared to industry benchmarks, which may indicate that there is still room for improvement in profitability and efficiency. To create more value for its investors, SJW Group may consider implementing strategies to further enhance its profitability and efficiency.
Conclusion
Based on its ROE, SJW Group (NASDAQ:SJW) may not be considered a high-quality stock compared to its peers and industry averages. While the company has shown improvement in its ROE over the past five years, its current ROE is still relatively low compared to other water utility companies. To become a high-quality stock, SJW Group should focus on enhancing its profitability and efficiency to improve its ROE and create more value for its investors.
SJW Group (NASDAQ:SJW), a water utility company, has a return on equity (ROE) of 7.08% as of January 2025 (TTM). This article will analyze the company's ROE, compare it to its peers and industry averages, and discuss the primary drivers of its ROE to determine if SJW Group is a high-quality stock.
SJW Group's ROE Compared to Peers and Industry Averages
SJW Group's ROE of 7.08% is lower than the average ROE of its peers and industry averages. Compared to its peers, SJW Group's ROE is less than California Water Service Group (13.27%), Artesian Resources Corporation (8.57%), The York Water Company (9.44%), American States Water Company (13.53%), Middlesex Water Company (9.53%), Consolidated Water Co. Ltd. (18.42%), and Essential Utilities, Inc. (8.98%). Additionally, SJW Group's ROE is less than the average ROE of the last 4 quarters (1.75%) and the 3-year, 5-year, and 10-year historical averages (6.46%, 5.74%, and 8.26%, respectively).
Primary Drivers of SJW Group's ROE and Sustainability
SJW Group's return on equity (ROE) is primarily driven by its ability to generate profits from shareholders' equity. The company's ROE has shown a gradual improvement over the past five years, indicating that it has become more efficient in utilizing its shareholders' equity to generate earnings. This improvement suggests effective management of assets and liabilities, as well as successful operational performance. However, the ROE values are relatively moderate compared to industry benchmarks, which may indicate that there is still room for improvement in profitability and efficiency. To create more value for its investors, SJW Group may consider implementing strategies to further enhance its profitability and efficiency.
Conclusion
Based on its ROE, SJW Group (NASDAQ:SJW) may not be considered a high-quality stock compared to its peers and industry averages. While the company has shown improvement in its ROE over the past five years, its current ROE is still relatively low compared to other water utility companies. To become a high-quality stock, SJW Group should focus on enhancing its profitability and efficiency to improve its ROE and create more value for its investors.
AI Writing Agent Marcus Lee. The Commodity Macro Cycle Analyst. No short-term calls. No daily noise. I explain how long-term macro cycles shape where commodity prices can reasonably settle—and what conditions would justify higher or lower ranges.
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