Hawaiian Electric Industries Inc (HE, Financial) has recently seen a significant uptick in its stock price, with a 41.89% gain over the past week and a 27.73% increase over the last three months. As of the latest data, the company's market capitalization stands at $1.39 billion. Despite these impressive gains, the GF Value, which is currently set at $43.16, labels the stock as a "Possible Value Trap, Think Twice." This valuation suggests that investors should be cautious, as the stock might not sustain its current price levels.
Overview of Hawaiian Electric Industries
Hawaiian Electric Industries serves as the parent company for three regulated utilities in Hawaii and operates Hawaii's American Savings Bank. These utilities provide essential electricity services across five islands, including Oahu, Hawaii, Maui, Molokai, and Lanai. This broad coverage ensures a stable revenue stream, critical for the company's financial health.
Assessing Profitability
The company's Profitability Rank is currently at 6/10, indicating moderate profitability. Hawaiian Electric Industries boasts an Operating Margin of 9.65%, which is better than 42.94% of its peers in the industry. Additionally, its Return on Equity (ROE) of 8.24% and Return on Assets (ROA) of 1.12% are also commendable, surpassing 48.28% and 23.76% of industry competitors, respectively. The Return on Invested Capital (ROIC) stands at 1.86%, further highlighting its efficient use of capital. Impressively, the company has maintained profitability for the past 10 years, a feat better than 99.8% of its peers.
Growth Metrics
Hawaiian Electric Industries has a Growth Rank of 5/10, reflecting average growth. The company has demonstrated a solid 3-Year Revenue Growth Rate per Share of 12.40%, outperforming 64.06% of its industry counterparts. However, its future revenue growth rate over the next 3 to 5 years is estimated at a modest 1.72%. In terms of earnings, the 3-Year EPS without NRI Growth Rate is 3.40%, and the 5-Year EPS without NRI Growth Rate is 2.00%. The estimated EPS Growth Rate for the next 3 to 5 years is 2.75%, indicating steady, if not spectacular, future earnings potential.
Notable Shareholders
Several prominent investors hold significant stakes in Hawaiian Electric Industries. Paul Tudor Jones (Trades, Portfolio) owns 382,958 shares, representing 0.35% of the company, while Jim Simons holds 281,600 shares, or 0.26%. Caxton Associates (Trades, Portfolio) holds a smaller stake of 121,772 shares, accounting for 0.11% of the company.
Competitive Landscape
When compared to its competitors, Hawaiian Electric Industries holds a strong market position. Oklo Inc (OKLO, Financial) has a market cap of $1.15 billion, Genie Energy Ltd (GNE, Financial) is valued at $458.237 million, and Summer Energy Holdings Inc (SUME, Financial) stands at $15.999 million. This positioning highlights Hawaiian Electric's significant role in the regulated utilities sector.
Conclusion
In conclusion, Hawaiian Electric Industries Inc exhibits a robust financial structure characterized by consistent profitability and moderate growth within a regulated industry. However, the current GF Value suggests caution, as the stock might be overvalued at its current price. Investors should consider this analysis carefully, especially given the stock's recent rapid price increase. The company's stable market position and the backing of notable investors add a layer of security for potential investors, making it a noteworthy consideration in the utilities sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
