ROIC
19%low FY2020
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SBS, COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP
A regulated utility, earning a set return on the capital it sinks into its network.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2024
R$36.1B
+41.3% YoY · 15% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue R$36.1B 5-yr avg R$24.2B
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Regulated utility. Returns are set by regulation on an approved rate base; the capital spending regulators approve becomes the growth, recovered through allowed rates.
- What moves the needle
- Gross margin has run about 37% and operating margin about 17% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from 10% to 30% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Read this kind of business on rate base and the allowed return. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 10%). By owner earnings: roughly 22% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2015–2024
realized figures from each filing · older years to the left| 2015’15 | 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | TTMTTMDec 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| R$11.7B | R$14.1B | R$14.6B | R$16.1B | R$18.0B | R$17.8B | R$19.5B | R$22.1B | R$25.6B | R$36.1B | R$36.1B | RevenueRevenue |
| 29% | 36% | 40% | 44% | 44% | 37% | 34% | 35% | 37% | 54% | 54% | Gross marginGross mgn |
| R$1.4B | R$2.7B | R$2.3B | R$2.8B | R$3.4B | R$1.8B | R$2.8B | R$3.8B | R$4.7B | R$11.0B | R$11.0B | Operating incomeOp. inc. |
| 11.9% | 18.9% | 15.9% | 17.3% | 18.8% | 10.3% | 14.3% | 17.4% | 18.3% | 30.4% | 30.4% | Operating marginOp. mgn |
| R$536M | R$2.9B | R$2.5B | R$2.8B | R$3.4B | R$973M | R$2.3B | R$3.1B | R$3.5B | R$9.6B | R$9.6B | Net incomeNet inc. |
| Cash flow & returns | |||||||||||
| R$2.6B | R$3.0B | R$3.3B | R$3.8B | R$4.2B | R$5.0B | R$3.9B | R$4.0B | R$4.9B | R$7.4B | R$7.4B | Operating cash flowOp. cash |
| R$1.1B | R$1.1B | R$1.3B | R$1.4B | R$1.8B | R$2.0B | R$2.3B | R$2.5B | R$2.8B | R$2.7B | R$2.7B | DepreciationDeprec. |
| R$1.0B | (R$1.1B) | (R$519M) | (R$385M) | R$2.6B | R$6.0B | (R$645M) | (R$1.6B) | (R$1.5B) | (R$4.9B) | (R$4.9B) | Working capital & otherWC & other |
| R$55M | R$28M | R$19M | R$51M | R$78M | R$42M | R$50M | R$74M | R$147M | R$101M | R$101M | CapexCapex |
| 0.5% | 0.2% | 0.1% | 0.3% | 0.4% | 0.2% | 0.3% | 0.3% | 0.6% | 0.3% | 0.3% | Capex / revenueCapex/rev |
| R$2.6B | R$3.0B | R$3.3B | R$3.8B | R$4.1B | R$4.9B | R$3.9B | R$3.9B | R$4.7B | R$7.3B | R$7.3B | Owner earningsOwner earn. |
| 22.1% | 21.1% | 22.5% | 23.6% | 22.9% | 27.7% | 19.8% | 17.7% | 18.4% | 20.2% | 20.2% | Owner earnings marginOE mgn |
| R$2.6B | R$3.0B | R$3.3B | R$3.8B | R$4.1B | R$4.9B | R$3.9B | R$3.9B | R$4.7B | R$7.3B | R$7.3B | Free cash flowFCF |
| 22.1% | 21.1% | 22.5% | 23.6% | 22.9% | 27.7% | 19.8% | 17.7% | 18.4% | 20.2% | 20.2% | Free cash flow marginFCF mgn |
| R$202M | R$139M | R$766M | R$653M | R$740M | R$890M | R$254M | R$604M | R$824M | R$929M | R$929M | Dividends paidDiv. paid |
| — | 11% | 9% | 10% | 11% | 5% | 7% | 9% | 10% | 19% | 19% | ROICROIC |
| 4% | 19% | 14% | 15% | 16% | 4% | 9% | 11% | 12% | 26% | 26% | Return on equityROE |
| 2% | 18% | 10% | 11% | 12% | 0% | 8% | 9% | 9% | 23% | 23% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| R$1.6B | R$1.9B | R$2.3B | R$3.0B | R$2.3B | R$396M | R$718M | R$1.9B | R$838M | R$1.7B | R$1.7B | Cash & investmentsCash+inv |
| — | R$1.6B | R$1.7B | R$1.8B | R$2.1B | R$2.2B | R$2.7B | R$3.1B | R$3.6B | R$3.9B | R$3.9B | ReceivablesReceiv. |
| — | R$58M | R$86M | R$66M | R$70M | R$105M | R$114M | R$124M | R$86M | R$11M | R$11M | InventoryInvent. |
| — | — | R$345M | R$466M | R$370M | R$264M | R$237M | R$431M | R$456M | R$767M | R$767M | Accounts payablePayables |
| — | R$1.6B | R$1.4B | R$1.4B | R$1.8B | R$2.0B | R$2.6B | R$2.8B | R$3.2B | R$3.1B | R$3.1B | Operating working capitalOper. WC |
| — | R$3.8B | R$4.6B | R$5.6B | R$4.9B | R$6.4B | R$6.5B | R$7.3B | R$7.8B | R$10.6B | R$10.6B | Current assetsCur. assets |
| — | R$4.3B | R$4.8B | R$5.4B | R$6.5B | R$5.9B | R$5.1B | R$6.7B | R$8.4B | R$12.0B | R$12.0B | Current liabilitiesCur. liab. |
| — | 0.9× | 1.0× | 1.0× | 0.8× | 1.1× | 1.3× | 1.1× | 0.9× | 0.9× | 0.9× | Current ratioCurr. ratio |
| — | R$36.7B | R$39.5B | R$43.6B | R$46.5B | R$50.4B | R$53.2B | R$57.2B | R$61.5B | R$81.0B | R$81.0B | Total assetsAssets |
| — | R$10.7B | R$10.4B | R$11.0B | R$10.4B | R$14.2B | R$15.9B | R$16.7B | R$16.9B | R$22.1B | R$22.1B | Total debtDebt |
| — | R$8.8B | R$8.1B | R$8.0B | R$8.1B | R$13.8B | R$15.2B | R$14.8B | R$16.1B | R$20.4B | R$20.4B | Net debt / (cash)Net debt |
| 1.6× | 3.2× | 3.4× | 3.5× | 2.9× | 1.4× | 1.9× | 2.0× | 1.7× | 4.1× | 4.1× | Interest coverageInt. cov. |
| R$13.7B | R$15.4B | R$17.5B | R$19.6B | R$21.6B | R$22.8B | R$24.9B | R$27.3B | R$29.9B | R$36.9B | R$36.9B | Shareholders’ equityEquity |
The record, charted
FY2015–2024Each measure over its full record; the current point and the worst year marked.
Gross margin
54%low FY2015
Net debt ÷ owner earnings
2.8×peak FY2021
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
R$7.3Bowner earningsvs.R$9.6Bnet incomelow FY2015
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2015FY2024
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2024 the business reported R$9.6B of profit but R$7.3B of owner earnings: R$2.3B less than the profit line, taken out by capital spending and the timing of cash.
| FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | |
|---|---|---|---|---|---|
| Reported net income | R$9.6B | R$3.5B | R$3.1B | R$2.3B | R$973M |
| Depreciation & amortizationnon-cash charge added back | +R$2.7B | +R$2.8B | +R$2.5B | +R$2.3B | −R$2.0B |
| Working capital & othertiming of cash in and out, other non-cash items | −R$4.9B | −R$1.5B | −R$1.6B | −R$645M | +R$6.0B |
| Cash from operations | R$7.4B | R$4.9B | R$4.0B | R$3.9B | R$5.0B |
| Capital expenditurecash put back in to keep running and to grow | −R$101M | −R$147M | −R$74M | −R$50M | −R$42M |
| Owner earnings | R$7.3B | R$4.7B | R$3.9B | R$3.9B | R$4.9B |
| Owner-earnings marginowner earnings ÷ revenue | 20% | 18% | 18% | 20% | 28% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Much of fiscal 2024's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2024 20-F · source on SEC EDGAR →
Will it survive?
- AdequateOperating income R$11.0B ÷ interest expense R$2.7B
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? R$20.4B · 1.9× operating profitModest net debtCash R$1.7B − debt R$22.1B
What this means
Netting R$1.7B of cash and short-term investments against R$22.1B of debt leaves R$20.4B owed, about 1.9× a year's operating profit (2.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- TightDSO 39 + DIO 0 − DPO 17 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Solid through the cycle9-yr median, range 5%–19%; 19% latest = NOPAT R$11.0B ÷ invested capital R$57.4BIndustry peers: median 8%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 19% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- High through the cycle10-yr median margin, range 18%–28%; latest R$7.3B = operating cash R$7.4B − maintenance capex R$101MIndustry peers: median 12%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 20% of revenue this year, a 21% median across 10 years.
- Mostly cash-backedCash from ops R$7.4B ÷ net income R$9.6B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Reinvests most of itDividends + buybacks R$929M ÷ Owner Earnings R$7.3B
What this means
Of R$7.3B Owner Earnings, R$929M (13%) went back to shareholders, R$929M dividends, R$0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.04×HarvestingCapex R$101M ÷ depreciation R$2.7B
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 3 of 5 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · R$36.1B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.89×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · R$22.1B vs (R$1.4B) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +170%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are R$7.72/share (latest year R$13.68), the averaged base the calculator's gate runs on, and book value is R$52.74/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2015–2024
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 10 of 10
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 1 of 9 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 16% → 22% (3-yr avg ends)
What this means
Through the cycle the operating margin widened — about 16% early to 22% lately, median 17% — pricing power intact or improving.
- Reinvestment, incremental ROIC 19%
What this means
Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.
- Owner earnings growth +9%/yr
What this means
Owner earnings grew about 9% a year over the record.
- Worst year 2020 · 10.3% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing Framed as a capability
The filing positions AI as something the company uses, not something it fears.
“We have also expanded the use of automated channels and artificial intelligence-based solutions, including IBM Watson-powered Interactive Voice Response (IVR) systems in our telephone service operations, with the aim of increasing service capacity, reducing average response time,…”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2024Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assetsR$10.6B
- Cash & short-term investmentsR$1.7B
- ReceivablesR$3.9B
- InventoryR$11M
- Other current assetsR$5.0B
Current liabilitiesR$12.0B
- Accounts payableR$767M
- Other current liabilitiesR$11.2B
Current ratio0.89×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.89×stricter: inventory excluded
Cash ratio0.14×strictest: cash alone against what's due
Working capital(R$1.4B)the cushion left after near-term bills
Deeper floors
Tangible book value(R$7.8B)equity stripped of goodwill & intangibles
Net current asset value(R$33.4B)Graham's net-net: current assets less all liabilities
Debt incl. operating leasesR$22.8BR$634M of it operating leases
Deferred revenueR$21Mcustomer cash collected before delivery; operating float
From the company's latest filing.
Debt maturity
the debt note, SEC EDGAR →Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.
Bars scaled to the largest single year.
Due in the next 12 monthsR$139Mthe first rung: what must be repaid or rolled over within the year
Within two yearsR$281Mthe near wall, the part most exposed to today’s credit conditions
Biggest single yearR$1.2Bin 2029the lumpiest maturity, where a refinancing, if needed, is largest
Due over the next five yearsR$1.6Bthe near slice; the balance sheet carries R$22.1B of debt in all
Against what the business has and earns
Cash & short-term investments, Dec 31, 2024R$1.7B
One year of owner earnings (FY2024)R$7.3B
Together, against R$139M due next year64.7×
Cash on hand as of Dec 31, 2024 plus a year’s owner earnings comes to R$9.0B against the R$139M due in the twelve months after the Dec 31, 2025 schedule: 65 times it.
Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.
How the cash was used, 2015–2024
Over the record, the business generated R$42.1B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- ReinvestedR$644M · 2%
- DividendsR$6.0B · 14%
- Retained (debt / cash)R$35.5B · 84%
- Returned to ownersR$6.0B
14% of the owner earnings the business produced over the span, R$6.0B as dividends and R$0 as buybacks.
- Net change in share count—
No continuous share count across the span.
- Dividend recordPays
Paid in 10 of the years on record. It was never cut over the span.
- Return on what it retained9%
Of the earnings it kept rather than paid out (R$25.7B over the span), annual owner earnings (first three years vs last three) grew R$2.4B, so each retained R$1 added about 0.09 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Peers, Water Utilities
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| EPDEnterprise Products Partners L.P. | $52.6B | 27% | 14.4% | — | 12% |
| SBSCOMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP | R$36.1B | 37% | 17.4% | 10% | 22% |
| OKEONEOK Inc. | $33.6B | 29% | 15.8% | 8% | 13% |
| NRGNRG Energy | $30.3B | 24% | 7.6% | 13% | 9% |
| NEENextEra Energy Inc. | $27.4B | — | 28.2% | 6% | — |
| WMWaste Management Inc. | $25.2B | 38% | 17.3% | 12% | 13% |
| CEGConstellation Energy | $22.7B | — | 5.0% | 8% | -17% |
| AEPAmerican Electric Power Company Inc. | $21.7B | — | 19.2% | 6% | 26% |
| Group median | — | 29% | 16.6% | 8% | 13% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American Depositary Shares , evidenced by American Depositary Receipts, each representing one Common”; COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP reports in BRL, so every figure in this tool is stated per ADS and translated at BRL 1 = $0.197 (2026-07-17, reference rate) so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed, in BRL.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP has delivered.
$
Through the cycle, COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP earns about $1.5B on its 21.6% median owner-earnings margin. This year’s 20.2% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’20→’24+8%/yr
Owner-earnings growth · ’15→’24+9%/yr
Owner-earnings growth · ’15→’24+9%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’22–’24)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $1.4B on 700M shares outstanding, per the 20-F cover, as of 2025-12-31; net debt $4.0B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP (SBS), the owner's record," https://ownerscorecard.com/c/SBS, data as of 2026-07-09.
Manual order: ← SBLK its page in the Manual SBSW →
Industry order: ← MSEX the Water Utilities chapter SJW →