Middlesex Water Company (MSEX) AI Stock Analysis

• Market Cap: $1.10B
• Dividend Yield: 2.16%
• Average Volume (3M): 238.47K
• Price to Earnings (P/E): 25.0
• Beta (1Y): 0.21
• Revenue Growth: 15.40%
• EPS Growth: 40.04%
• Country: US
• Employees: 360
• Sector: Utilities
• Sector Strength: 90
• Industry: Regulated Water
• EPS (TTM): 2.46
• Shares Outstanding: 17,887,453
• 10 Day Avg. Volume: 177,765
• 30 Day Avg. Volume: 238,466
• PEG Ratio: 0.62
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.59
• Price to Cash Flow (P/CF): 12.50
• P/FCF Ratio: 12.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.50
• Price Target Upside: 11.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

MSEX maintains a robust financial standing with strong revenue growth and operational efficiency. Despite a healthy balance sheet, increasing debt warrants caution. Recent technical momentum is positive, though potential overbought conditions suggest vigilance. Valuation is fair, supporting both growth and income strategies.

Positive Factors

Financial Performance

Middlesex Water Company has been upgraded to Outperform due to strong Q4 results that exceeded estimates for all key metrics.

Growth Strategy

There is a bullish outlook on the company's growth strategy, driven by a strong capital expenditure profile for the next 3 years.

Negative Factors

Market Conditions

Despite a belief that a 25 P/E multiple is appropriate, current market conditions and volatility could affect the share price.

Regulatory and Weather Risks

Risks for the company include changes in state regulatory climate and weather-related earnings volatility.

Valuation

The shares of Middlesex Water now trading above the Fair Value estimate has led to a downgrade in rating from Buy to Neutral based on valuation.

Middlesex Water Company Business Overview & Revenue Model

Company Description

Middlesex Water Company (MSEX) is a publicly traded utility company that provides water and wastewater services. Established in 1897 and headquartered in Iselin, New Jersey, Middlesex operates in the regulated water utility sector, serving residential, commercial, industrial, and municipal customers primarily in New Jersey and Delaware. The company focuses on the treatment, distribution, and sale of water, as well as the collection and treatment of wastewater.

How the Company Makes Money

Middlesex Water Company generates revenue primarily through the sale of water and the provision of wastewater services. The company's key revenue streams include residential, commercial, and industrial water sales, as well as wastewater collection and treatment services. As a regulated utility, Middlesex's rates are determined by state regulatory commissions, which ensures a stable and predictable revenue model. Additionally, the company engages in long-term contracts and partnerships with municipalities and other entities to supply water and wastewater services, further contributing to its earnings stability and growth.

Middlesex Water Company Financial Statement Overview

Summary

Middlesex Water Company demonstrates strong financial performance with consistent revenue growth and solid profitability. The income statement is robust, while the balance sheet is stable but shows increasing debt. Cash flow management is efficient, with strong operating cash flow and improved free cash flow.

Income Statement

Middlesex Water Company demonstrates a strong income statement with consistent revenue growth and solid profitability. The gross profit margin and EBIT margin are robust, indicating good cost management and operational efficiency. Net profit margin has shown improvement, reflecting effective bottom-line control. The revenue growth rate from the previous year is impressive, showcasing a positive growth trajectory.

Balance Sheet

The balance sheet of Middlesex Water Company is stable with a moderate debt-to-equity ratio, indicating manageable leverage. The return on equity is healthy, reflecting efficient use of shareholder funds. The equity ratio is adequate, ensuring a balanced capital structure. However, total debt has increased over the years, which could be a concern if not managed prudently.

Cash Flow

Cash flow analysis reveals strong operating cash flow generation, which supports the net income well. There is significant improvement in free cash flow in the latest period, indicating enhanced cash flow management. The operating cash flow to net income ratio is favorable, suggesting solid cash conversion efficiency. However, capital expenditures have historically been high, which may impact free cash flow during expansion phases.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
191.88M	166.27M	162.43M	143.14M	141.59M
	Gross Profit
191.88M	83.16M	83.34M	69.47M	70.80M
	EBIT
53.21M	39.22M	47.33M	33.21M	37.42M
	EBITDA
92.06M	72.72M	74.12M	62.04M	58.54M
	Net Income Common Stockholders
44.35M	31.52M	42.43M	36.54M	38.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.23M	2.39M	3.83M	3.53M	4.49M
	Total Assets
1.26B	1.24B	1.07B	1.02B	976.47M
	Total Debt
375.82M	412.31M	366.95M	330.62M	287.54M
	Net Debt
371.60M	409.92M	363.12M	327.08M	283.05M
	Total Liabilities
809.91M	810.98M	672.04M	650.21M	628.18M
	Stockholders Equity
445.26M	425.07M	402.41M	369.81M	348.29M
Cash Flow		Free Cash Flow
58.73M	-37.40M	-29.97M	-46.35M	-52.26M
	Operating Cash Flow
58.73M	52.78M	61.36M	33.03M	53.35M
	Investing Cash Flow
-74.62M	-90.18M	-88.21M	-79.38M	-105.62M
	Financing Cash Flow
17.73M	35.96M	27.15M	39.48M	16.17M

Middlesex Water Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSEX, the sentiment is Positive. The current price of 62.14 is above the 20-day moving average (MA) of 61.93, above the 50-day MA of 57.27, and above the 200-day MA of 59.30, indicating a bullish trend. The MACD of 2.14 indicates Negative momentum. The RSI at 69.39 is Neutral, neither overbought nor oversold. The STOCH value of 87.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSEX.

Middlesex Water Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SJW	79 Outperform	$1.76B	18.01	7.23%	3.14%	11.65%	6.78%
CWT	77 Outperform	$2.89B	14.91	12.46%	2.35%	30.48%	267.73%
MSEX	76 Outperform	$1.10B	25.00	10.17%	2.16%	15.40%	40.04%
WTRG	71 Outperform	$10.40B	17.41	9.84%	3.40%	1.57%	16.50%
AWR	69 Neutral	$2.92B	23.90	14.01%	2.41%	-0.04%	-5.82%
Sector *	65 Neutral	$11.75B	15.50	6.20%	4.60%	5.53%	-8.93%
YORW	61 Neutral	$475.28M	23.31	8.99%	2.60%	5.53%	-14.72%

Middlesex Water Company Corporate Events

Middlesex Water Secures Executive Retention Amid Changes

Middlesex Water Company has renewed its Change in Control Agreements with key executives, effective January 1, 2025, ensuring severance benefits in case of employment termination after a change in control. These agreements promise compensation, including lump sum payments and benefit continuations, if executives are dismissed without cause or resign for valid reasons post-acquisition or board changes. This strategic move indicates the company’s proactive approach to executive retention amid potential market shifts.