Is Select Water Solutions, Inc. overvalued or undervalued?

As of 17 October 2025, Select Water Solutions, Inc. has moved from a fair to a very expensive valuation grade. The company appears overvalued based on its P/E ratio of 22, which is higher than the peer average of 22.06 for Middlesex Water Co. and 22.76 for American States Water Co. Additionally, its EV to EBITDA ratio of 5.66 is significantly lower than the industry average of 14.36 for Essential Utilities, indicating a potential overvaluation. The dividend yield of 304.54% seems attractive but may not be sustainable given the low ROE of 5.98% and ROCE of 6.89%.
In terms of stock performance, Select Water Solutions has underperformed against the S&P 500 over the year, with a return of -3.47% compared to the S&P's 14.08%. This trend is further highlighted by its year-to-date return of -18.13%, contrasting sharply with the S&P's 13.30%. Overall, these metrics suggest that Select Water Solutions, Inc. is overvalued relative to its peers and market performance.