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Southwest Gas Holdings, Inc. (SWX) — WACC Analysis

WACC Breakdown

Southwest Gas Holdings, Inc. (SWX) has a weighted average cost of capital (WACC) of 6.5%. The cost of equity is 9.2%, derived from a beta of 1.00 and a risk-free rate of 5.0%. The after-tax cost of debt is 1.6%. The capital structure is 64.1% equity and 35.9% debt.

Interpretation

A WACC of 6.5% suggests that the market views Southwest Gas Holdings, Inc. as relatively low-risk, with a lower cost of financing.

Investors can compare SWX's WACC of 6.5% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

SWX WACC: 6.46% for Southwest Gas Holdings, Inc.

Current inputs imply a 9.19% cost of equity and a 2.00% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Southwest Gas Holdings, Inc. Common Stock (SWX) WACC Results
Weighted Average Cost of Capital
6.46%
Cost of Equity
9.19%
Risk-Free Rate4.96%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
1.58%
Pre-Tax Cost of Debt2.00%
Tax Rate21.00%
Tax Shield0.42%
Capital Structure
Equity: 64.07%($6259.32M)
Debt: 35.93%($3509.86M)
Equity Component
5.89%
64.07% × 9.19%
Debt Component
0.57%
35.93% × 1.58%

Southwest Gas Holdings, Inc. (SWX) WACC in context

Southwest Gas Holdings, Inc. (SWX) currently screens with an estimated WACC of 6.46%. That blends a 9.19% cost of equity, a 2.00% pre-tax cost of debt, and a 64.07% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What SWX WACC implies

A 6.46% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates SWX

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 64.07% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.