U.S. Markets close in 4 hrs 59 mins

Hawaiian Electric Gains on Tourism Growth & Systematic Capex

Zacks Equity Research
1 / 2

Stock Market News For Nov 16, 2018

Wall Street finished in the green reversing its five-day negative trend on Thursday following news that United States and China have ramped up their efforts to resolve lingering trade disputes

We have recently issued an updated research report on Hawaiian Electric Industries, Inc. HE. The company reported second-quarter 2018 adjusted earnings of 61 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line improved 16.7% from 36 cents in the year-ago period.

In the reported quarter, total revenues of $685.3 million outpaced the Zacks Consensus Estimate of $638 million by 7.4%. Moreover, the top line rose 8.4% from the prior-year quarter’s figure.

Honolulu-based Hawaiian Electric incorporated in 1981, is a holding company with subsidiaries engaged in electric utility, banking and other businesses, operating primarily in the state of Hawaii.

What’s Driving the Stock?

Hawaiian Electric continues to make systematic investments in utility infrastructure development projects, primarily adding new generation facilities, replacing aging infrastructure and restoring transmission and distribution assets. In 2017, the company invested $400 million for modernization and improvement of Hawaii's electric grids. For 2018, the company plans to invest approximately $450 million in the utility and expects rate base growth in the range of 8-10% net of bonus depreciation.

Hawaii’s gradual recovery in the Hawaiian economy, backed by lower unemployment rate and higher median sales price for single-family residential homes and increasing private building permits are likely to act as catalysts for the company’s future performance. Also, airlines have increased scheduled air seats to Hawaii, particularly from the Western United States. This should further fuel visitor arrivals in Hawaii, boosting electricity demand in the state and in turn, profits of Hawaiian Electric.

In the second quarter of 2018, Hawaii’s visitor arrivals increased 7.3% and expenditures rose 10.3% in the reported quarter from the year-ago period’s level. The tourism expansion that began in 2010 has continued and the company expects the outlook to remain positive, projecting to achieve yet another record setting year in 2018 with 10 million visitors’ arrival anticipated by this year-end.

Hawaiian Electric plans to maintain a stable and regular dividend payout. It disbursed a dividend of 31 cents per share during the second quarter. Also, the company's dividend yiled of 3.5% is better than the industry yiled of 3.2%. As of Jun 30, 2018, the company paid dividends worth $51.7 million to its shareholders, up from $43.9 million paid in the year-earlier period.

Hawaiian Electric Industries, Inc. Price

Hawaiian Electric Industries, Inc. Price | Hawaiian Electric Industries, Inc. Quote

Zacks Rank & Key Picks

Hawaiian Electric currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some better-ranked stocks from the Zacks Utility – Electric Power Industry are as follows:

NRG Energy, Inc. NRG sports a Zacks Rank #1. The stock has seen the Zacks Consensus Estimate for 2018 earnings per share move 16.6% north over the past 60 days to $4.14.

Algonquin Power & Utilities Corp. AQN carries a Zacks Rank #2 (Buy). The stock has seen the consensus estimate for current-year earnings being revised 3% upward over the past 60 days to 68 cents per share.

IDACorp, Inc. IDA) holds a Zacks Rank of 2. The stock has seen the consensus mark for 2018 bottom line per share being raised 2.2% over the past 60 days to $4.28.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
Hawaiian Electric Industries, Inc. (HE) : Free Stock Analysis Report
IDACORP, Inc. (IDA) : Free Stock Analysis Report
Algonquin Power & Utilities Corp. (AQN) : Free Stock Analysis Report
To read this article on Zacks.com click here.