Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We have maintained our Neutral recommendation on Hawaiian Electric Industries Inc. (HE - Analyst Report) on Jun 12, 2013 based on the company’s constructive regulatory structure and strong regulated growth opportunities partially offset by lower electricity volume sales and uncertainty over the Japanese economy. Also, the company has recently lowered its earnings guidance for 2013.

Why the Reiteration?

Hawaiian Electric is the largest provider of electricity in the state of Hawaii supplying to more than 95% of the state’s population. The prospects of the company arise from the fact that its two major industries, tourism and construction, are experiencing growth.

Meanwhile, the company is on track to comply with the Hawaii Clean Energy Initiative that calls for generating 70% of its energy needs from renewable sources by 2030. With a distinct focus on renewable energy projects, the company targets capital expenditure of approximately $2.9 billion over the next five years. Also, the company expects annual rate base growth in the range of 5% to 10%.

The company’s recent move towards underwriting public offering of its common stock will fulfill all equity needs through 2014. The company intends to use the net proceeds for investment in its utility subsidiaries, to repay borrowings incurred to finance capital expenditures and for working capital purposes.

Unlike its peers, the company is also engaged in providing banking services to individual and commercial customers. Its banking subsidiary is one of the largest banks in Hawaii.  During the quarter, American Savings Bank delivered strong loan growth that helped in offsetting the impact of the low interest rate environment and gained market share in its mortgage banking business. The bank was one of the top ranked lenders in the state for the quarter.

Apart from the company’s focus on improving operational excellence, we expect the company’s other approved cost recovery mechanisms and constructive regulatory outcomes in its rate cases to keep the growth story intact.

Despite these positives, the company’s dull first quarter performance as a result of higher non-interest and operation and maintenance expenses, lower electricity volume sales, a tourism-dependant Hawaiian economy, lowered guidance and uncertainty over the Japanese economy remain matters of concern for the company.

Other Stocks to Consider

Hawaiian Electric currently has a Zacks Rank #3 (Hold). Stocks that are well placed in the energy space are ALLETE, Inc. (ALE - Snapshot Report), El Paso Electric Co. (EE - Snapshot Report) and DTE Energy Company (DTE - Analyst Report), all with a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%