Does Artesian Resources Corporation's (NASDAQ:ARTN.A) Weak Fundamentals Mean That The Market Could Correct Its Share Price?
Most readers would already be aware that Artesian Resources' (NASDAQ:ARTN.A) stock increased significantly by 12% over the past three months. However, we decided to pay close attention to its weak financials as we are doubtful that the current momentum will keep up, given the scenario. Specifically, we decided to study Artesian Resources' ROE in this article.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Artesian Resources is:
8.5% = US$20m ÷ US$239m (Based on the trailing twelve months to December 2024).
The 'return' is the amount earned after tax over the last twelve months. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.09 in profit.
View our latest analysis for Artesian Resources
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
When you first look at it, Artesian Resources' ROE doesn't look that attractive. Yet, a closer study shows that the company's ROE is similar to the industry average of 9.9%. On the other hand, Artesian Resources reported a fairly low 3.4% net income growth over the past five years. Bear in mind, the company's ROE is not very high . So this could also be one of the reasons behind the company's low growth in earnings.
As a next step, we compared Artesian Resources' net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 9.1% in the same period.
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for ARTN.A? You can find out in our latest intrinsic value infographic research report
The high three-year median payout ratio of 60% (that is, the company retains only 40% of its income) over the past three years for Artesian Resources suggests that the company's earnings growth was lower as a result of paying out a majority of its earnings.
Moreover, Artesian Resources has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth.
On the whole, Artesian Resources' performance is quite a big let-down. As a result of its low ROE and lack of much reinvestment into the business, the company has seen a disappointing earnings growth rate. In brief, we think the company is risky and investors should think twice before making any final judgement on this company. Our risks dashboard would have the 2 risks we have identified for Artesian Resources.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Stock Market Today: Stocks Make a Comeback From Trade Jitters, Boeing Crash
Stock Market Today: Stocks Make a Comeback From Trade Jitters, Boeing Crash originally appeared on TheStreet. Updated 4:30 p.m. ET Stocks ended higher Thursday, as investors reacted to inflation data, while President Donald Trump pushed for an interest rate cut. The Dow Jones Industrial Average gained 101.85 points, or 0.24%, to finish the session at 42,967.62, while the S&P 500 rose 0.38% to close 6,045.26 and the tech-heavy Nasdaq advanced 0.24% to end the day at 19,662.48. Microsoft hit a 52-week high of $480.40, while Oracle surged 13.3% after the software company beat Wall Street's fourth-quarter earnings expectations. Trump called Federal Reserve Chair Jerome Powell a 'numbskull' as he demanded an interest-rate cut, CNBC reported. Trump claimed that lowering rates by 2 percentage points would save the U.S. $600 billion per year, 'but we can't get this guy to do it.' 'We're going to spend $600 billion a year, $600 billion because of one numbskull that sits here [and says] 'I don't see enough reason to cut the rates now,'' Trump said. Trump added that he was OK with the Fed raising rates if inflation was going up. 'But it's down,' he said, 'and I may have to force something.' Updated 10:55 a.m. ET Perhaps the label to describe Thursday's market is this: It's an inertia market. It sagged at the open, (for good reason with the Air India crash), regained its footing and now is drifting into the close with modest gains. The issues that have dominated everyone's thinking at the open are still there: What will happen with tariffs? Short answer: Unclear and volatile. President Trump planned to impose unilateral tariffs on dozens of trading partners in the coming weeks unless they come up with real trade proposals. What is happening with interest rates? Short answer: The 10-year Treasury yield was at 4.36%, down from Wednesday's 4.427%. What will happen with President Trump's tax bill? Short answer: Not clear if any Senate Republicans will break with the president. How is the economy faring? Short answer: OK. Inflation is seemingly benign. Economic softness has not resulted in layoffs. How is the political stress? We'll find with the Army parade and the protests planned for around the country. One sign of rising tensions: Sen. Alex Padilla, D-Calif., was tossed out of Homeland Security Secretary Kristi Noem's Los Angeles news conference today. So, at 3:40 p.m. ET, the Standard & 500 Index was up 17 points to 6,040. The Nasdaq Composite Index was up 31 points to 19,647. The Dow Jones Industrial Average were up 61 points to 42,927. The index had been down as many as 259 points right after the open. Much of the Dow's performance was due to Boeing () , whose shares were off by nearly 5% after an Air India 787 Dreamliner crashed on takeoff from India's Ahmedabad airport. Only one of 242 people aboard survived. If Boeing was simply flat on the day, the Dow would be up nearly 125 points. So, the market is up, not a lot. But at least not down. It's just been wandering along. Updated 10:55 a.m. ET Stocks pushed into positive territory Thursday despite trade worries and the aftermath of a Boeing 787 airliner crash in India. President Trump said late Wednesday he planned to impose unilateral tariffs on dozens of trading partners in the coming weeks. The administration wants more deals now and expects to send letters to more than 150 countries saying, essentially, make trade offers now or see new tariffs imposed. Boeing () shares were off 5.2% after the Air India 787 crash on a flight to London from India's Ahmedabad airport. The plane crashed after takeoff around 12:30 a.m. EDT. Officials said 242 people aboard the plane with no survivors expected. At 10:55 a.m. EDT, the Standard & 500 Index was up 19 points to 6,041. The Nasdaq Composite Index was up nearly 58 points to 19,674. The Dow Jones Industrial Average was up 6 points to 42,873. The index had been down as many as 259 points right after the open. Much of the decline was due to Boeing. Six of 11 S&P 500 sectors were higher, led by information technology stocks. Oracle () was fueling the tech surge. Palantir Technologies () , Apple () and Microchip Technology () were among the decliners. Oracle shares were up a stunning 14% to $201.69 (a new 52-week high) after the company set the software company set 'stunning' growth targets for next year, according to one analyst. The question now is if Oracle can meet them, Barrons noted. After Wednesday's close the company reported a better than expected 11% jump in sales and targeted even higher growth ahead. The company sees a total cloud growth rate of 40% in fiscal 2026, up from 24% this year. Oracle sees cloud infrastructure growth north of 70% next year, up from 50% this year. Initial jobless claims were unchanged at 248,000, unchanged from a week ago. Many economists are watching this report closely to see how tariffs are affecting the economy. The U.S. labor market appears to be losing steam, in part because of economic uncertainty spawned by President Donald's aggressive tariffs proposals, Reuters said. Continuing claims were estimated at 1.96 million in the week through May 31. That was the highest level since November as the effects of the Covid0-19 pandemic were easing. Updated 9:55 a.m. ET Stocks opened lower on Thursday after President Trump said late Wednesday he planned to impose unilateral tariffs on dozens of trading partners in the coming weeks. But the administration wants more deals now and expects to send letters to more than 150 countries saying, essentially, make trade offers or see new tariffs imposed. The market was also weakened by a 4.4% decline to $204.53 in shares of Boeing after an Air India 787 Dreamliner crashed in India. Airline stocks were generally lower. Oracle () was up more than 10% to $195.30 after the database-software and cloud-services company logged higher-than-expected quarterly revenue and earnings. It said it expected "dramatically higher" revenue growth in the financial year that started recently. Shares of Gamestop () were down 17% to $23.73 after the gaming retailer said it wanted to raise $1.75 billion in a note offering to invest in bitcoin. At 9:55 a.m. ET, the Standard & 500 Index was down 3 points to 6,020. The Nasdaq Composite Index was off 15 points to 19,601. The Dow Jones Industrial Average was off 149 points to 42,717. Much of the decline was due to Boeing. Crude oil was lower. The 10-year Treasury yield was at 4.82%, down from Wednesday's 4.427%. Stocks were facing a weak open after President Trump said late Wednesday he planned to impose unilateral tariffs on dozens of trading partners in the coming weeks. Speaking to reporters at the Kennedy Center, he said the U.S. was very happy about its trade truce reset with China. But the administration wants more deals now and expects to send letters to more than 150 countries saying, essentially, make trade offers or see new tariffs imposed. 💸💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💸 Separately, market jitters intensified amid heightened tensions in the Middle East. Ahead of the open, futures in the Standard & Poor's 500 Index fell 34 points. Nasdaq-100 trading showed a decline of 134 points, and the futures on the Dow Jones Industrial Average were off 288 points. The cautious mood is stalling a rebound in US stocks that had brought the S&P 500 within reach of its all-time high, even as questions about the economic impact of Trump's trade agenda persisted. Decent earnings and limited economic fallout have supported the rally so far. The question is how long the optimism can last. Shares of aerospace giant Boeing () were down about 7.7% to $197.57. A 787 Dreamliner heading to London from India's Ahmedabad crashed after takeoff around 12:30 a.m. EDT. Reports say 242 people were on board. Local authorities told AP that no one appeared to have survived the crash. It was the first crash of a 787 in 14 years of service. Ahmedabad is in Gujarat state in west-central India. The market wasn't helped by another decent report on inflation. The Producer Price Index, which measures price changes that that companies receive, was up 0.1% in May, the Bureau of Labor Statistics said. On an annualized basis, the index was up 2.6% from a year earlier. Core PPI, which strips out energy and prices, was up 2.7%. It probably means the Federal Reserve won't raise interest rates at next week's meeting. Some good news on the earnings front: Oracle () shares were up nearly 9% in premarket trading after the software stalwart beat estimates and offered positive guidance. Stock Market Today: Stocks Make a Comeback From Trade Jitters, Boeing Crash first appeared on TheStreet on Jun 12, 2025 This story was originally reported by TheStreet on Jun 12, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Applied Digital (NasdaqGS:APLD) Partners With ABB To Enhance AI Data Center Efficiency
Applied Digital recently announced a significant infrastructure partnership with ABB, aiming to enhance the energy efficiency and power density of AI data centers. This development appears to align with the company's impressive share price growth of 127% over the past month. The partnership may have contributed to this surge by boosting investor confidence in the company's forward-looking AI initiatives. Amidst this, broader market indices like the S&P 500 and Nasdaq have experienced smaller, steady gains, suggesting that Applied Digital's specific developments provided additional momentum beyond overall market trends. Be aware that Applied Digital is showing 2 risks in our investment analysis and 1 of those is a bit unpleasant. Find companies with promising cash flow potential yet trading below their fair value. The recent partnership between Applied Digital and ABB represents a significant development that could bolster the company's AI data center initiatives. This collaboration aligns with Applied Digital's efforts to improve energy efficiency and power density, key considerations for future revenue growth and net margin improvement. By addressing these areas, Applied Digital could better position itself to handle anticipated developments, such as the transition to a data center REIT structure and ongoing strategic options for its Cloud Services Business. Over the past five years, Applied Digital's total shareholder return, encompassing both share price appreciation and dividends, has increased by a very large percentage, specifically 13289.04%. This growth contrasts starkly with the broader market, where over the past year, the company's shares have surpassed the US Market's 11.2% return and the US IT industry's 40.1% return. Such performance highlights investor optimism surrounding the company's strategic shifts and business potential. The recently announced partnership and shift in business strategy are expected to significantly influence Applied Digital's revenue and earnings forecasts. The strategic moves are anticipated to be crucial in increasing future revenue, especially with the projected $5 billion investment influx from collaborations like Macquarie Asset Management. Despite the current challenges, analysts suggest that substantial revenue and earnings growth is expected, although profitability remains a few years away. With a current share price of US$4.48 and an analyst price target of US$9.94, the shares trade at a notable discount, indicating potential upside amidst these strategic developments. As the company continues to execute its business plans, monitoring how these predictions unfold in the coming months will be essential for stakeholders. Gain insights into Applied Digital's historical outcomes by reviewing our past performance report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:APLD. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Wall St ends sharply lower as Iran retaliates against Israel attack
STORY: Stocks fell across the board Friday after more clashes in the Middle East, with the Dow dropping about 1.8%, the S&P 500 more than 1% and the Nasdaq declining 1.3%. Iran launched missiles at Israel in response to intensive Israeli strikes aimed at crippling Tehran's ability to build nuclear weapons. Airline stocks fell on fears that fuel costs could climb, while defense stocks such as Lockheed Martin and Northrop Grumman rose. Melissa Brown, managing director of investment decision research at SImCorp, says she thinks the effect of the conflict may be short-lived. 'Over the long-termn,I've seen studies that show that wars generally don't have a major impact on stock markets over you know, say a period of a few months to a few years with some obvious exceptions. [FLASH] If we don't see a huge escalation, particularly outside of the borders where we're already seeing the conflict, I think that investors are going to go back to the idea that the Fed's going to lower rates, that we're not going to be in a recession, and even with somewhat higher oil prices, we managed quite well with higher oil prices for the past few years.' Other stocks on the move included Photoshop maker Adobe, which lost more than 5%. The company raised its annual revenue forecast but that was overshadowed by concerns that the pace of its AI adoption was too slow. And shares of Oracle jumped more than 7.5% to hit a record high. The stock is now up more than 21% in the two days since the technology company gave an upbeat forecast driven by demand for its AI services. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
