Middlesex Water Company (MSEX)
Debt-to-equity ratio
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Long-term debt | US$ in thousands | 358,153 | 290,280 | 290,280 | 273,244 | 230,777 |
Total stockholders’ equity | US$ in thousands | 422,991 | 400,328 | 367,726 | 348,292 | 325,876 |
Debt-to-equity ratio | 0.85 | 0.73 | 0.79 | 0.78 | 0.71 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $358,153K ÷ $422,991K
= 0.85
The debt-to-equity ratio of Middlesex Water Co. has shown a consistent upward trend over the past five years, increasing from 0.79 in 2019 to 0.96 in 2023. This indicates that the company has been utilizing more debt relative to its equity to finance its operations and investments.
A debt-to-equity ratio above 1 typically suggests that a company is more reliant on debt to fund its operations, which may pose higher financial risk due to the obligation to pay interest and principal on the debt. However, Middlesex Water Co.'s ratios have been below 1, indicating that the company has been maintaining a balanced capital structure with a mix of debt and equity.
It is important to note that a higher debt-to-equity ratio can also signal that a company is leveraging its operations to potentially generate higher returns for shareholders. However, investors should monitor the trend in the ratio over time to ensure that the company's debt levels are sustainable and in line with its overall financial health and risk tolerance.
Peer comparison
Dec 31, 2023