SJW Group: Outlook Remains Positive, But There Are Weather Pattern Issues

Summary

• SJW Group has exhibited volatility in earnings over the last four years.
• Earnings for FY-2020 were barely above FY-2017, despite additional share issues and borrowings to fund acquisitions.
• Based on analysts' estimates, the effect of acquisitions should start to be seen in EPS growth in future years.
• Weather patterns have caused water supply security concerns for the company, raising the prospect of purchased water impacting margins.

Photo by Sundry Photography/iStock via Getty Images

Santa Cruz Mountains - source of surface water for SJW Group

Investment Thesis

Back in November 2020, I published article, "SJW Group: Continue To Wait And Watch". Since then, the share price has

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. I do not recommend that anyone act upon any investment information without first consulting an investment advisor and/or a tax advisor as to the suitability of such investments for their specific situation. Neither information nor any opinion expressed in this article constitutes a solicitation, an offer, or a recommendation to buy, sell, or dispose of any investment, or to provide any investment advice or service. An opinion in this article can change at any time without notice.