H&E EQUIPMENT SERVICES INC (HEES) Stock Fundamental Analysis
NASDAQ:HEES - Nasdaq - US4040301081 - Common Stock - Currency: USD
Overall HEES gets a fundamental rating of 4 out of 10. We evaluated HEES against 50 industry peers in the Trading Companies & Distributors industry. There are concerns on the financial health of HEES while its profitability can be described as average. HEES is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
HEES had positive earnings in the past year.
In the past year HEES had a positive cash flow from operations.
Of the past 5 years HEES 4 years were profitable.
In the past 5 years HEES always reported a positive cash flow from operatings.
1.2 Ratios
HEES has a Return On Assets (4.40%) which is comparable to the rest of the industry.
HEES has a Return On Equity of 19.76%. This is in the better half of the industry: HEES outperforms 80.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.89%, HEES is in line with its industry, outperforming 52.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HEES is in line with the industry average of 9.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.4% | ||
| ROE | 19.76% | ||
| ROIC | 6.89% |
ROA(3y)5.53%
ROA(5y)3.97%
ROE(3y)28.14%
ROE(5y)20.89%
ROIC(3y)8.17%
ROIC(5y)6.83%
1.3 Margins
Looking at the Profit Margin, with a value of 8.11%, HEES is in the better half of the industry, outperforming 74.00% of the companies in the same industry.
In the last couple of years the Profit Margin of HEES has remained more or less at the same level.
With a decent Operating Margin value of 14.48%, HEES is doing good in the industry, outperforming 76.00% of the companies in the same industry.
HEES's Operating Margin has been stable in the last couple of years.
HEES has a Gross Margin of 44.52%. This is in the better half of the industry: HEES outperforms 76.00% of its industry peers.
HEES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.48% | ||
| PM (TTM) | 8.11% | ||
| GM | 44.52% |
OM growth 3Y7.13%
OM growth 5Y0.88%
PM growth 3Y-5.62%
PM growth 5Y0.89%
GM growth 3Y4.44%
GM growth 5Y2.47%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HEES is destroying value.
HEES has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, HEES has more shares outstanding
Compared to 1 year ago, HEES has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.89 indicates that HEES is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.89, HEES is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
The Debt to FCF ratio of HEES is 32.65, which is on the high side as it means it would take HEES, 32.65 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 32.65, HEES is in line with its industry, outperforming 42.00% of the companies in the same industry.
A Debt/Equity ratio of 2.33 is on the high side and indicates that HEES has dependencies on debt financing.
The Debt to Equity ratio of HEES (2.33) is worse than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 32.65 | ||
| Altman-Z | 1.89 |
ROIC/WACC0.76
WACC9.1%
2.3 Liquidity
A Current Ratio of 0.73 indicates that HEES may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.73, HEES is doing worse than 94.00% of the companies in the same industry.
HEES has a Quick Ratio of 0.73. This is a bad value and indicates that HEES is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.70, HEES is not doing good in the industry: 76.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
HEES shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.62%.
Measured over the past 5 years, HEES shows a small growth in Earnings Per Share. The EPS has been growing by 5.09% on average per year.
The Revenue has been growing slightly by 3.22% in the past year.
The Revenue has been growing slightly by 6.18% on average over the past years.
EPS 1Y (TTM)-27.62%
EPS 3Y24.34%
EPS 5Y5.09%
EPS Q2Q%-32.65%
Revenue 1Y (TTM)3.22%
Revenue growth 3Y12.58%
Revenue growth 5Y6.18%
Sales Q2Q%-0.45%
3.2 Future
HEES is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.67% yearly.
The Revenue is expected to grow by 4.99% on average over the next years.
EPS Next Y9.96%
EPS Next 2Y9.67%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.32%
Revenue Next 2Y4.99%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.07, which means the current valuation is very expensive for HEES.
HEES's Price/Earnings ratio is in line with the industry average.
HEES's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.29.
The Price/Forward Earnings ratio is 23.71, which indicates a rather expensive current valuation of HEES.
HEES's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. HEES is more expensive than 60.00% of the companies in the same industry.
HEES is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.07 | ||
| Fwd PE | 23.71 |
4.2 Price Multiples
HEES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. HEES is cheaper than 80.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HEES is valued a bit more expensive than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 74.58 | ||
| EV/EBITDA | 7.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of HEES may justify a higher PE ratio.
PEG (NY)2.62
PEG (5Y)5.13
EPS Next 2Y9.67%
EPS Next 3YN/A
5. Dividend
5.1 Amount
HEES has a Yearly Dividend Yield of 1.22%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.94, HEES has a dividend in line with its industry peers.
With a Dividend Yield of 1.22, HEES pays less dividend than the S&P500 average, which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
The dividend of HEES decreases each year by -0.02%.
HEES has paid a dividend for at least 10 years, which is a reliable track record.
HEES has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-0.02%
Div Incr Years0
Div Non Decr Years10
5.3 Sustainability
HEES pays out 32.70% of its income as dividend. This is a sustainable payout ratio.
DP32.7%
EPS Next 2Y9.67%
EPS Next 3YN/A
90.19
-0.19 (-0.21%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners85.48%
Inst Owner Change-6.37%
Ins Owners12.41%
Ins Owner Change1.83%
Market Cap3.31B
Analysts47.5
Price Target86.7 (-3.87%)
Short Float %3.28%
Short Ratio1.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
Yearly Dividend1.1
Dividend Growth(5Y)-0.02%
DP32.7%
Div Incr Years0
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.56%
Min EPS beat(2)-17.08%
Max EPS beat(2)20.2%
EPS beat(4)1
Avg EPS beat(4)-5.19%
Min EPS beat(4)-17.08%
Max EPS beat(4)20.2%
EPS beat(8)5
Avg EPS beat(8)1.89%
EPS beat(12)9
Avg EPS beat(12)12.86%
EPS beat(16)12
Avg EPS beat(16)12.09%
Revenue beat(2)1
Avg Revenue beat(2)-0.86%
Min Revenue beat(2)-2.8%
Max Revenue beat(2)1.09%
Revenue beat(4)2
Avg Revenue beat(4)-0.47%
Min Revenue beat(4)-3.44%
Max Revenue beat(4)3.28%
Revenue beat(8)5
Avg Revenue beat(8)0.62%
Revenue beat(12)8
Avg Revenue beat(12)1%
Revenue beat(16)9
Avg Revenue beat(16)-1.47%
PT rev (1m)0%
PT rev (3m)17.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.9%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.07 | ||
| Fwd PE | 23.71 | ||
| P/S | 2.18 | ||
| P/FCF | 74.58 | ||
| P/OCF | 6.67 | ||
| P/B | 5.31 | ||
| P/tB | 7.8 | ||
| EV/EBITDA | 7.26 |
EPS(TTM)3.46
EY3.84%
EPS(NY)3.8
Fwd EY4.22%
FCF(TTM)1.21
FCFY1.34%
OCF(TTM)13.52
OCFY14.99%
SpS41.36
BVpS16.98
TBVpS11.56
PEG (NY)2.62
PEG (5Y)5.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.4% | ||
| ROE | 19.76% | ||
| ROCE | 9.09% | ||
| ROIC | 6.89% | ||
| ROICexc | 6.94% | ||
| ROICexgc | 7.56% | ||
| OM | 14.48% | ||
| PM (TTM) | 8.11% | ||
| GM | 44.52% | ||
| FCFM | 2.92% |
ROA(3y)5.53%
ROA(5y)3.97%
ROE(3y)28.14%
ROE(5y)20.89%
ROIC(3y)8.17%
ROIC(5y)6.83%
ROICexc(3y)8.33%
ROICexc(5y)7.4%
ROICexgc(3y)8.97%
ROICexgc(5y)7.96%
ROCE(3y)10.79%
ROCE(5y)9.02%
ROICexcg growth 3Y1.18%
ROICexcg growth 5Y-1.16%
ROICexc growth 3Y0.48%
ROICexc growth 5Y-0.78%
OM growth 3Y7.13%
OM growth 5Y0.88%
PM growth 3Y-5.62%
PM growth 5Y0.89%
GM growth 3Y4.44%
GM growth 5Y2.47%
F-Score5
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.33 | ||
| Debt/FCF | 32.65 | ||
| Debt/EBITDA | 2.21 | ||
| Cap/Depr | 103.97% | ||
| Cap/Sales | 29.75% | ||
| Interest Coverage | 3.11 | ||
| Cash Conversion | 75.82% | ||
| Profit Quality | 36.06% | ||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 1.89 |
F-Score5
WACC9.1%
ROIC/WACC0.76
Cap/Depr(3y)155.79%
Cap/Depr(5y)138%
Cap/Sales(3y)40.66%
Cap/Sales(5y)35.59%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-27.62%
EPS 3Y24.34%
EPS 5Y5.09%
EPS Q2Q%-32.65%
EPS Next Y9.96%
EPS Next 2Y9.67%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)3.22%
Revenue growth 3Y12.58%
Revenue growth 5Y6.18%
Sales Q2Q%-0.45%
Revenue Next Year3.32%
Revenue Next 2Y4.99%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-21.28%
EBIT growth 3Y20.61%
EBIT growth 5Y7.11%
EBIT Next Year196.66%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y113.03%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y22.22%
OCF growth 3Y24.05%
OCF growth 5Y9.2%