- The company continues to be free-cash-flow negative and relies heavily on debt to make up for the additional cash that is needed to finance its CapEx program.
- Despite the recent 13% price decline, MSEX still trades at over 10x revenue and ~30x LTM EV/EBITDA which makes the stock extremely expensive from a relative and absolute perspective.
- Rising rates are therefore a major risk at this point given the fact that the company might run into trouble when trying to refinance some of the existing debt.
For further details see:
Don't Buy Middlesex Water Just For The Dividend