Download PDF

1. Company Snapshot

1.a. Company Description

Southwest Gas Holdings, Inc., through its subsidiaries, distributes and transports natural gas in Arizona, Nevada, and California.The company operates through Natural Gas Distribution, Utility Infrastructure Services, and Pipeline and Storage segments.It also provides trenching, installation, and replacement of underground pipes, as well as maintenance services for energy distribution systems.


As of December 31, 2021, it had 2,159,000 residential, commercial, industrial, and other natural gas customers.Southwest Gas Holdings, Inc.was incorporated in 1931 and is headquartered in Las Vegas, Nevada.

Show Full description

1.b. Last Insights on SWX

Southwest Gas Holdings, Inc.'s recent performance was positively driven by its strong Q4 2025 financial results, with $300M utility net income and $284M adjusted net income exceeding the top end of its 2025 net income guidance range. The company's board of directors approved a 4% increase in the quarterly common stock dividend to $0.645 per share. Additionally, S&P credit ratings for SWX and SWG were upgraded to BBB+, reflecting improved financial health. The company also initiated 2026 and forward-looking EPS and rate base guidance metrics.

1.c. Company Highlights

2. Southwest Gas Holdings' 2025 Earnings: A Strong Foundation for Future Growth

Southwest Gas Holdings reported adjusted earnings per diluted share from continuing operations of $3.65 in 2025, representing a 19% increase from $3.07 in 2024. The company's adjusted net income rose by 8.7% to $283.9 million, driven by a $120 million improvement in operating margin, primarily due to rate relief and customer growth. The earnings per share (EPS) growth was accompanied by a significant reduction in financing costs at the holding company. However, the actual EPS came out at $0.942, below estimates of $1.4.

Publication Date: Feb -26

📋 Highlights
  • Balance Sheet Strengthening:: Disposition of Centuri and debt payoff reduced holding company debt, enhancing financial flexibility for growth opportunities.
  • Leadership Transition:: Karen Haller retiring after 30 years; Justin Brown appointed as CEO, emphasizing operational excellence and regulatory progress.
  • 2026 Earnings Guidance:: Initiated $4.17–$4.32 EPS range, with 12–14% CAGR from 2025–2030 driven by rate relief and Great Basin expansion.
  • Regulatory Filings:: Arizona rate case seeks $100M+ revenue increase (10.25% ROE requested) and Nevada case expected in early 2026.
  • Capital Investment Plan:: $1.25B in 2026, $6.3B through 2030, focused on transmission expansion and system reliability, including $1.7B Great Basin project.

Revenue Growth and Margin Expansion

The company's operating margin expansion was driven by $95.2 million of combined rate relief, $11.5 million of margin from continued customer growth, and $8 million related to recovery and return mechanisms. The revenue growth is expected to continue, with analysts estimating a 7.5% increase in revenues for the next year. The company's ability to expand its margin is crucial in driving future earnings growth.

Regulatory Progress and Rate Cases

The company expects to file its Arizona rate case this week, with rates anticipated to become effective in April next year. The proposal includes a revenue increase of over $100 million, with a proposed rate base of $3.9 billion and a requested return on equity (ROE) of 10.25%. The company is also planning to file its Nevada rate case next month, demonstrating its commitment to regulatory progress and rate relief.

Growth Prospects and Capital Investment

The company has initiated 2026 EPS guidance in the range of $4.17 to $4.32 per share, driven by continued operating margin expansion and rate relief across all jurisdictions. The expected growth rate is front-end loaded through 2028 and 2029, with approximately 15% to 17% EPS growth rate over those periods. The company plans to invest approximately $1.25 billion in 2026, with a total of approximately $6.3 billion for the 5 years ending in 2030, focused on safety, system integrity, reliability, and new business distribution system growth.

Valuation Metrics

Using the current valuation metrics, the company's Price-to-Earnings (P/E) Ratio is 14.32, and the Dividend Yield is 2.85%. The Return on Equity (ROE) is 11.96%, indicating a relatively stable return profile. As Justin Forsberg mentioned, "the 7% longer-term base Southwest Gas rate base growth does not include any upsides from Great Basin," suggesting that the current valuation may not fully capture the potential upside from the Great Basin expansion project.

3. NewsRoom

Card image cap

Elo Mutual Pension Insurance Co Purchases New Shares in Southwest Gas Corporation $SWX

Mar -06

Source: defenseworld.net

Card image cap

Brokerages Set Southwest Gas Corporation (NYSE:SWX) PT at $88.40

Mar -05

Source: defenseworld.net

Card image cap

Southwest Gas Has a 14% Annual Growth Target Through 2030 Despite Earnings Miss

Feb -26

Source: 247wallst.com

Card image cap

Southwest Gas' Fourth-Quarter Earnings & Revenues Miss Estimates

Feb -26

Source: zacks.com

Card image cap

Southwest Gas Holdings, Inc. (SWX) Q4 2025 Earnings Call Transcript

Feb -25

Source: seekingalpha.com

Card image cap

Southwest Gas (SWX) Lags Q4 Earnings and Revenue Estimates

Feb -25

Source: zacks.com

Card image cap

Southwest Gas Holdings, Inc. Reports Fourth Quarter and Full-Year 2025 Financial Results

Feb -25

Source: prnewswire.com

Card image cap

Southwest Gas Holdings Announces CEO Succession Plan

Feb -25

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Utility Infrastructure Services

Expected Growth: 4.83%

Southwest Gas Holdings, Inc.'s Utility Infrastructure Services segment growth of 4.83% is driven by increasing demand for natural gas infrastructure, expansion into new markets, and investments in pipeline modernization and replacement. Additionally, favorable regulatory environments and growing customer base contribute to the segment's growth.

Natural Gas Distribution

Expected Growth: 4.83%

Southwest Gas Holdings, Inc.'s 4.83% growth in Natural Gas Distribution is driven by increasing demand from residential and commercial customers, expansion into new markets, and investments in infrastructure upgrades and pipeline replacements. Additionally, favorable weather conditions and rising prices contribute to the growth.

Pipeline and Storage

Expected Growth: 4.83%

Southwest Gas Holdings, Inc.'s Pipeline and Storage segment growth of 4.83% is driven by increasing natural gas demand, expansion of pipeline infrastructure, and strategic acquisitions. Additionally, favorable regulatory environments, growing LNG exports, and rising shale gas production contribute to the segment's growth.

7. Detailed Products

Natural Gas Distribution

Southwest Gas Holdings, Inc. provides natural gas distribution services to residential, commercial, and industrial customers in Nevada, Arizona, and California.

Pipeline Construction Services

The company offers pipeline construction services, including design, construction, and maintenance of natural gas infrastructure.

Gas Infrastructure Services

Southwest Gas Holdings, Inc. provides gas infrastructure services, including pipeline inspection, maintenance, and repair.

Energy Services

The company offers energy services, including energy efficiency programs, renewable energy solutions, and energy management services.

Utility Services

Southwest Gas Holdings, Inc. provides utility services, including meter reading, billing, and customer service.

8. Southwest Gas Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Southwest Gas Holdings, Inc. operates in a highly regulated industry, which limits the threat of substitutes. However, the increasing adoption of renewable energy sources and energy-efficient technologies poses a moderate threat to the company's operations.

Bargaining Power Of Customers

Southwest Gas Holdings, Inc. serves a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's operations are regulated, which limits the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

Southwest Gas Holdings, Inc. relies on a few large suppliers for its natural gas and energy needs. While the company has some bargaining power due to its large scale of operations, suppliers still have some negotiating power.

Threat Of New Entrants

The natural gas industry is highly regulated, and new entrants face significant barriers to entry, including high capital costs and regulatory hurdles. This limits the threat of new entrants to Southwest Gas Holdings, Inc.'s operations.

Intensity Of Rivalry

The natural gas industry is highly competitive, with several large players competing for market share. Southwest Gas Holdings, Inc. faces intense competition from other gas utilities and energy companies, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.61%
Debt Cost 5.73%
Equity Weight 38.39%
Equity Cost 5.73%
WACC 5.73%
Leverage 160.47%

11. Quality Control: Southwest Gas Holdings, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ONE Gas

A-Score: 6.4/10

Value: 6.4

Growth: 4.4

Quality: 4.8

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
UGI

A-Score: 6.4/10

Value: 6.0

Growth: 2.4

Quality: 4.8

Yield: 8.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Atmos Energy

A-Score: 6.3/10

Value: 4.9

Growth: 5.0

Quality: 5.7

Yield: 4.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
New Jersey Resources

A-Score: 6.3/10

Value: 6.3

Growth: 4.3

Quality: 4.4

Yield: 8.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Southwest Gas Holdings

A-Score: 6.1/10

Value: 4.3

Growth: 5.2

Quality: 3.6

Yield: 7.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
New Fortress Energy

A-Score: 3.9/10

Value: 10.0

Growth: 6.4

Quality: 3.4

Yield: 3.0

Momentum: 0.0

Volatility: 0.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

87.71$

Current Price

87.71$

Potential

-0.00%

Expected Cash-Flows