NYSE:HEI
$49.67
(3/17 4:00PM)
-2.1%
| Open | $50.1 |
Mkt Cap | $529.1 Million |
| High | $50.81 |
52Wk High | $51.89 |
| Low | $49.58 |
52Wk Low | $23.36 |
| Volume | 85,268 |
Avg Vol 10D | 93,000 |
Ockham's Rating/Recommendation Summary
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HEI Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, HEI the high and low end of the Price to Sales per share ratios are 2.76x and 1.53x respectively.
Notice that HEI's current Price to Sales per share ratio is 2.45x, which is above its historical average only slightly. So, while not a major concern it is worth noting that from a value perspective HEI does not look undervalued on a Price to Sales basis. However, were the Price to Sales ratio to drop by 14% (the historical average) then we would become more positive on this stock.
HEI Cash Earnings
Looking at HEI specifically in their Cash Earnings capabilities, Ockham views HEI as above their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for HEI, the current level of Cash Earnings compared to its historical levels helps identify where HEI is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 25.19 and a historical low Cash Earnings per share ratio of 13.97, an investor can relate where value becomes optimal.
So, again, with a current Price to Cash Earnings per share ratio of 21.95, HEI is presently above its historical range. Ockham Research is always focused upon the value that investors have placed upon a given metric in the past. In other words, how much would an investor pay for a particular level of Cash Earnings in terms of stock price, and how does that relate to today. Naturally, we utilize proprietary methods to accomplish this, but the basic premise holds true and is simple to understand. For HEI, we are a bit negative on the Cash Earnings level given its higher than historical norm.
HEI Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from HEI against the historic high and low levels over an available data range. Because HEI has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In HEI’s case, the estimated annual dividend is $0.12 producing a current dividend yield of 0.24%. The highest dividend yield from HEI in recent history was 0.75% while the lowest dividend yield was 0.15%. While it is quite common for a growth stock to pay no dividend at all, but for a mature company such as HEI that has a history of paying dividends it is disappointing to see their dividend yield drop so significantly. At this time, the current dividend yield is 46.67% below the median yield.
