Hamilton Beach (HBB) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Hamilton Beach (HBB) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Hamilton Beach Fundamentals
Stock Price Target: $24.57
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Hamilton Beach in comparison to the Home Furnishing industry and the S&P 500.
Hamilton Beach is a Small Cap company with a Market Cap of $177.9M.
How are investors using Hamilton Beach earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Hamilton Beach is 12.32%, in comparison to 3.99% for the S&P 500 and 1.75% for the 10-year treasury bond. The median earnings yield for the Home Furnishing industry is 12.38%.
What does Hamilton Beach Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Hamilton Beach is currently trading at a P/E of 6.42. The P/E for the Home Furnishing industry is 10.87 and the P/E for the S&P 500 is 25.08.
What is the current Price-to-Sales Ratio (P/S) for Hamilton Beach?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Hamilton Beach is currently trading at a P/S of 0.29. The P/S for the Home Furnishing industry is 1.05 and the P/S for the S&P 500 is 3.01.
How does Hamilton Beach Price-to-BookRatio (P/B) compare to the Home Furnishing industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Hamilton Beach P/B ratio is 2.19. The P/B for the Home Furnishing industry is 2.86 and the P/B for the S&P 500 is 4.54.
How attractive is Hamilton Beach Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Hamilton Beach ROIC is currently 21.30% in comparison to 15.12% for the Home Furnishing industry and 9.10% for the S&P 500.
How has HBB stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Hamilton Beach has traded between the range of $12.16 and $26.
The current Analyst Price Target for Hamilton Beach is $24.57.
What is Hamilton Beach YOY Performance in comparison to its industry and the total market?
The YOY performance for Hamilton Beach is -28.21%. The Home Furnishing industry has a YOY performance of 11.31% in comparison to the YOY S&P 500 performance of 15.77%.
Recent Financial Results (Q3, 2021)
- Total revenue increased 41.8% to $156.7M compared to $110.5M in previous years quarter
- Sales through the e-commerce channel accounted for 31% of total revenue
- Sales of premium products increased 35%
- Gross profit margin of 21.2% compared to 21.5% in previous years quarter
- Operating profit increased to $7.4M compared to an operating loss of $2.4M in the previous years quarter
- Net debt (debt minus cash) and cash equivalents, of $113.5M compared to $69.6M as of September 2020
Stock Price Target: $24.57
Hamilton Beach Brands designs, markets, and distributes small electric household and specialty housewares appliances in the US and internationally. It offers air fryers, blenders, coffee makers, food processors, indoor electric grills, irons, juicers, mixers, slow cookers, toasters, and toaster ovens.
The company sells its products through a network of mass merchandisers, e-commerce retailers, national department stores, variety store and drug store chains, specialty home retailers, distributors, restaurants, bars, hotels, and other retail outlets. Hamilton Beach Brands was founded in 1904 and is headquartered in Glen Allen, Virginia. The current CEO is Gregory H. Trepp.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.