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Hawaiian Electric Industries Inc. Message Board

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  • Pull_Collective Pull_Collective Sep 19, 2010 2:30 PM Flag

    Why are the analyst ratings so bad?

    Well Buttfox -

    This is a company refusing to recognize that they do not earn enough money to pay out a dividend they choose to pay.

    To pay this un-justified dividend they either take out a loan or sell more stock.

    Mostly HE just sells more new stock --- but that dilutes the value of existing stock.

    And diluting the stock generally always causes the price to go down, so shareholders lose just in the pursuit of a rich dividend.

    Worse yet - Connie's only approach to make things better is to petition to have the locals electric rates increased. No new efficiecies. No increased trash to energy burning.

    Business 101 teaches that firms are not to take out loans to pay dividends.

    The yahoos in charge of HE failed that class.

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    • A lot of half-truths about the dividend. Fact is last quarter HE earned .31 and paid a dividend of .31 but you don't see that posted here. Sure earnings should be covering more of it, but cash flow has generally supported paying the dividend even when they didn't earn it.

      There are a couple of people posting (probably the same person) who have an issue with the management - probably lost their job there - who should not be relied on for objective views on this company or the stock.

      • 1 Reply to hedge_babe
      • > cash flow has generally supported paying the dividend


        hey, here's a 10min little thing you should try before making your next bet. look up free cash flow (FCF) on google, and then click on the cash flow tab in yahoo for HE, and see if you can find even one quarter where FCF covers the dividend. hint: FCF is operational cash flow minus capital expenditures.

        > a couple of people posting ... who should not be relied on for objective views

        do your own homework.


    • Don't forget the part about capital intensive industries that try to increase their revenues by increasing their depreciation rates.

    • Well said and you are correct. Business 101 indeed!

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