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How Does Hawaiian Electric Industries, Inc.'s (NYSE:HE) Earnings Growth Stack Up Against The Industry?

Simply Wall St

When Hawaiian Electric Industries, Inc. (NYSE:HE) announced its most recent earnings (30 September 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Hawaiian Electric Industries performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see HE has performed.

Check out our latest analysis for Hawaiian Electric Industries

How Did HE's Recent Performance Stack Up Against Its Past?

HE's trailing twelve-month earnings (from 30 September 2019) of US$201m has increased by 9.0% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.4%, indicating the rate at which HE is growing has accelerated. How has it been able to do this? Let's take a look at whether it is only because of industry tailwinds, or if Hawaiian Electric Industries has experienced some company-specific growth.

NYSE:HE Income Statement, November 16th 2019

In terms of returns from investment, Hawaiian Electric Industries has fallen short of achieving a 20% return on equity (ROE), recording 8.8% instead. Furthermore, its return on assets (ROA) of 2.2% is below the US Electric Utilities industry of 4.5%, indicating Hawaiian Electric Industries's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hawaiian Electric Industries’s debt level, has declined over the past 3 years from 2.9% to 2.5%.

What does this mean?

Hawaiian Electric Industries's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Hawaiian Electric Industries to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HE’s future growth? Take a look at our free research report of analyst consensus for HE’s outlook.
  2. Financial Health: Are HE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.