Current Price
$54.86
PE Ratio (TTM)
20.6x
Intrinsic Value
$55.37
+0.9% margin of safety
COMPETITIVE MOAT
↑Essential Service Monopoly
SJW Group operates as a regulated utility, providing a vital service with limited competition. This creates a natural monopoly in its service territories, ensuring consistent demand.
↑High Capital Intensity
The water utility industry requires substantial ongoing investment in infrastructure. This high barrier to entry deters new competitors from entering SJW's established markets.
↑Regulatory Framework
Rate-setting by regulatory bodies provides a predictable revenue stream and shields SJW from aggressive price competition. This stability is a key advantage.
INVESTMENT RISKS
↓Aging Infrastructure
SJW faces significant costs to maintain and upgrade its aging water infrastructure. Unexpected failures can lead to substantial repair expenses and service disruptions.
↓Regulatory Changes
Changes in regulatory policy, such as stricter environmental standards or altered rate-setting mechanisms, could negatively impact SJW's profitability and operational flexibility.
↓Water Scarcity & Climate
Droughts and climate change pose risks to water availability and quality in SJW's service areas. This could necessitate costly investments in new water sources or conservation programs.
Base case
SJW base case PE valuation
A base case PE valuation for SJW estimates a fair value of about $55.37 per share, against a current price of $54.86. The model assumes 4.8% annual earnings growth, a 21x target PE multiple, and a 10% discount rate.
Intrinsic Value
$55.37
Margin of safety
+0.9%
Expected annual return
+0.2%
Base case assumptions: 4.8% annual earnings growth, 21x target PE, 10% discount rate, 5 year projection. Data as of 2025-05-05.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SJW PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for SJW Group respond.
Open PE Calculator for SJWCompany Overview
Operating across the United States, SJW Group, through its various subsidiaries, delivers essential water and wastewater utility services. Its operations encompass the full spectrum of water management, from sourcing and acquiring water supplies to their storage, purification, and subsequent distribution, including both wholesale and retail provision, alongside wastewater management services. Beyond its core utility offerings, SJW Group provides a range of non-regulated services. These include managing water system operations, undertaking maintenance contracts, and leasing antenna sites. It also offers specialized contracted services and manages sewer operations for other water utilities. Additionally, the company offers a unique "Linebacker protection plan" to its drinking water customers in Connecticut and Maine. The company utilizes a diverse portfolio of water sources. These include groundwater extracted from wells, surface water derived from watershed runoff and diversions, treated reclaimed water, and imported water acquired from the Santa Clara Valley Water District. SJW Group's extensive customer base spans multiple states. In California, the company serves approximately one million individuals through roughly 231,000 active connections. This extensive service area encompasses parts of San Jose and Cupertino, along with the cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos, plus surrounding unincorporated areas within Santa Clara County. Its operations further extend to Connecticut and Maine, where it supplies water to about 456,000 residents via 140,000 connections. This service covers 81 distinct municipalities across an area of approximately 269 square miles. Additionally, in the Texas corridor situated between San Antonio and Austin, SJW Group supports around 70,000 people through approximately 24,000 connections, covering about 266 square miles. Finally, its wastewater services cater to roughly 3,000 connections in Southbury, Connecticut. The company also holds significant real estate assets, including undeveloped land in both California and Tennessee, and manages commercial buildings and warehouse facilities within Tennessee. Established in 1985, the organization initially operated under the name SJW Corp. before rebranding as SJW Group in November 2016. Its corporate headquarters are located in San Jose, California.
Financial Metrics — SJW PE Stock Valuation Data
PE Ratio (TTM)
20.6x
PEG Ratio
n/m
Earnings Yield
4.85%
ROE (TTM)
6.6%
Revenue/Share (TTM)
$21.52
Dividend Yield
3.01%
Debt/Equity
1.02x
Frequently Asked Questions
What is the PE ratio of SJW?
The trailing twelve-month PE ratio of SJW reflects how much investors pay per dollar of SJW Group's earnings. This metric is most useful when compared to Regulated Water peers and the company's own historical range.
Is SJW overvalued based on PE ratio?
SJW's PE of 20.6x combined with a PEG ratio of -10.27 provides a growth-adjusted perspective. SJW has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Regulated Water, a DCF analysis may be more appropriate.
How do I value SJW stock using PE ratio?
To value SJW Group using PE: (1) Compare the current PE (20.6x) against the Regulated Water median to assess relative pricing, (2) check the PEG ratio (-10.27) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of SJW?
SJW's PEG ratio is -10.27, calculated by dividing the PE ratio (20.6x) by the expected earnings growth rate. Because SJW has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for SJW stock valuation?
PE ratio gives a quick relative read — how SJW is priced versus Regulated Water peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See SJW DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Utilities valuationsP/E and DCF value SJW with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2025-05-05. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.