MeritValue

Southwest Gas Holdings, Inc.

SWXdata completeness 100%11 fiscal years on file
The thesis, from the filings

Southwest Gas Holdings, Inc. earns about 3% on invested capital, but has diluted owners by 22% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $28.48 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.5B1$4.96B2$5.43B2$2.48B3$1.94B3
Net income$200.8M4−$203.3M5$150.9M6$198.8M6$439.8M6
Operating cash flow$111.4M7$407.5M8$509.2M9$1.36B9$556.1M9
Capital expenditure$715.6M10$859.4M11$765.9M12$846.6M12$807.9M12
Free cash flow (derived)−$604.2M7−$452M8−$256.7M9$509.2M9−$251.8M9
Total debt$7.01B13$6.72B14$5.28B15$4.18B16$3.51B16
Cash & equivalents$222.7M17$123.1M18$106.5M19$314.8M20$576.6M20
Diluted shares59.3M65.6M71.0M72.0M72.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$547.59
your share of equity
Profit it earned you last year
$60.8
Free cash flow it threw off
−$34.81
Debt you’d be carrying
$484.95

10 shares is a claim on $547.59 of net worth that earned you $60.8 and generated −$34.81 of cash last year, against $484.95 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
3% avg · 5y
FY21 3%FY22 -0%FY23 4%FY24 3%FY25 3%

It earned an average 3% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+22% shares · 5y

Share count is up 22% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 50% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$28.48
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$198.8M
  • growthAssumed0.0%
Graham Number
$86.55
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001692115-22-000005 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001692115-24-000038 (Revenues)
  3. 10-K · period ending 2024-12-31 · accession 0001692115-26-000062 (RegulatedAndUnregulatedOperatingRevenue)
  4. 10-K · period ending 2021-12-31 · accession 0001692115-24-000038 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001692115-25-000082 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001692115-26-000062 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001692115-24-000038 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001692115-25-000082 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001692115-26-000062 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001692115-24-000038 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001692115-25-000082 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001692115-26-000062 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001692115-23-000056 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001692115-24-000038 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001692115-25-000082 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001692115-26-000062 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001692115-23-000056 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001692115-24-000038 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001692115-25-000082 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001692115-26-000062 (CashAndCashEquivalentsAtCarryingValue)