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HAMMOND POWER SOLUTIONS INC (HPS-A.CA) Stock Fundamental Analysis

TSX:HPS-A - Toronto Stock Exchange - CA4085491039 - Common Stock - Currency: CAD

94.53  -4.93 (-4.96%)

Fundamental Rating

8

Taking everything into account, HPS-A scores 8 out of 10 in our fundamental rating. HPS-A was compared to 15 industry peers in the Electrical Equipment industry. While HPS-A has a great profitability rating, there are some minor concerns on its financial health. HPS-A is growing strongly while it also seems undervalued. This is an interesting combination This makes HPS-A very considerable for value and growth investing!


Dividend Valuation Growth Profitability Health

10

1. Profitability

1.1 Basic Checks

In the past year HPS-A was profitable.
HPS-A had a positive operating cash flow in the past year.
Each year in the past 5 years HPS-A has been profitable.
Each year in the past 5 years HPS-A had a positive operating cash flow.
HPS-A.CA Yearly Net Income VS EBIT VS OCF VS FCFHPS-A.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -500M -1B -1.5B -2B -2.5B

1.2 Ratios

HPS-A's Return On Assets of 14.91% is amongst the best of the industry. HPS-A outperforms 100.00% of its industry peers.
HPS-A has a Return On Equity of 24.99%. This is amongst the best in the industry. HPS-A outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.83%, HPS-A belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HPS-A is significantly above the industry average of 14.60%.
The last Return On Invested Capital (23.83%) for HPS-A is above the 3 year average (19.80%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 14.91%
ROE 24.99%
ROIC 23.83%
ROA(3y)12.26%
ROA(5y)9.93%
ROE(3y)21.64%
ROE(5y)17.57%
ROIC(3y)19.8%
ROIC(5y)N/A
HPS-A.CA Yearly ROA, ROE, ROICHPS-A.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -500 -1K -1.5K

1.3 Margins

HPS-A has a better Profit Margin (8.84%) than 100.00% of its industry peers.
HPS-A's Profit Margin has improved in the last couple of years.
HPS-A has a better Operating Margin (12.22%) than 100.00% of its industry peers.
HPS-A's Operating Margin has improved in the last couple of years.
HPS-A's Gross Margin of 33.46% is amongst the best of the industry. HPS-A outperforms 92.86% of its industry peers.
In the last couple of years the Gross Margin of HPS-A has grown nicely.
Industry RankSector Rank
OM 12.22%
PM (TTM) 8.84%
GM 33.46%
OM growth 3YN/A
OM growth 5Y22.69%
PM growth 3Y26.82%
PM growth 5YN/A
GM growth 3Y8.78%
GM growth 5Y6.99%
HPS-A.CA Yearly Profit, Operating, Gross MarginsHPS-A.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -200 -400 -600 -800

6

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HPS-A is creating value.
HPS-A has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HPS-A has been increased compared to 5 years ago.
HPS-A has a worse debt/assets ratio than last year.
HPS-A.CA Yearly Shares OutstandingHPS-A.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2M 4M 6M 8M 10M
HPS-A.CA Yearly Total Debt VS Total AssetsHPS-A.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M

2.2 Solvency

HPS-A has an Altman-Z score of 6.52. This indicates that HPS-A is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HPS-A (6.52) is better than 78.57% of its industry peers.
HPS-A has a debt to FCF ratio of 1.38. This is a very positive value and a sign of high solvency as it would only need 1.38 years to pay back of all of its debts.
HPS-A has a Debt to FCF ratio of 1.38. This is amongst the best in the industry. HPS-A outperforms 100.00% of its industry peers.
HPS-A has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of HPS-A (0.11) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.11
Debt/FCF 1.38
Altman-Z 6.52
ROIC/WACC2.67
WACC8.91%
HPS-A.CA Yearly LT Debt VS Equity VS FCFHPS-A.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50M 100M 150M 200M

2.3 Liquidity

A Current Ratio of 1.97 indicates that HPS-A should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.97, HPS-A is doing good in the industry, outperforming 78.57% of the companies in the same industry.
A Quick Ratio of 1.19 indicates that HPS-A should not have too much problems paying its short term obligations.
The Quick ratio of HPS-A (1.19) is better than 64.29% of its industry peers.
Industry RankSector Rank
Current Ratio 1.97
Quick Ratio 1.19
HPS-A.CA Yearly Current Assets VS Current LiabilitesHPS-A.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M

7

3. Growth

3.1 Past

HPS-A shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.04%, which is quite good.
Measured over the past years, HPS-A shows a very strong growth in Earnings Per Share. The EPS has been growing by 64.33% on average per year.
Looking at the last year, HPS-A shows a quite strong growth in Revenue. The Revenue has grown by 14.90% in the last year.
HPS-A shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.72% yearly.
EPS 1Y (TTM)10.04%
EPS 3Y64.33%
EPS 5YN/A
EPS Q2Q%13.22%
Revenue 1Y (TTM)14.9%
Revenue growth 3Y30.15%
Revenue growth 5Y17.72%
Sales Q2Q%6.94%

3.2 Future

The Earnings Per Share is expected to grow by 11.84% on average over the next years. This is quite good.
The Revenue is expected to grow by 10.77% on average over the next years. This is quite good.
EPS Next Y8.28%
EPS Next 2Y17.24%
EPS Next 3Y11.84%
EPS Next 5YN/A
Revenue Next Year11.07%
Revenue Next 2Y11.36%
Revenue Next 3Y10.77%
Revenue Next 5YN/A

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
HPS-A.CA Yearly Revenue VS EstimatesHPS-A.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
HPS-A.CA Yearly EPS VS EstimatesHPS-A.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

7

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 16.58, the valuation of HPS-A can be described as correct.
Based on the Price/Earnings ratio, HPS-A is valued cheaper than 92.86% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.12, HPS-A is valued a bit cheaper.
HPS-A is valuated correctly with a Price/Forward Earnings ratio of 12.90.
HPS-A's Price/Forward Earnings ratio is rather cheap when compared to the industry. HPS-A is cheaper than 92.86% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 94.77. HPS-A is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 16.58
Fwd PE 12.9
HPS-A.CA Price Earnings VS Forward Price EarningsHPS-A.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, HPS-A is valued cheaply inside the industry as 92.86% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, HPS-A is valued cheaper than 92.86% of the companies in the same industry.
Industry RankSector Rank
P/FCF 32.38
EV/EBITDA 8.07
HPS-A.CA Per share dataHPS-A.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80

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 excellent profitability rating of HPS-A may justify a higher PE ratio.
PEG (NY)2
PEG (5Y)N/A
EPS Next 2Y17.24%
EPS Next 3Y11.84%

6

5. Dividend

5.1 Amount

HPS-A has a Yearly Dividend Yield of 1.00%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of HPS-A has falen by -24.83%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 0.81, HPS-A pays a better dividend. On top of this HPS-A pays more dividend than 100.00% of the companies listed in the same industry.
With a Dividend Yield of 1.00, HPS-A pays less dividend than the S&P500 average, which is at 2.29.
Industry RankSector Rank
Dividend Yield 1%

5.2 History

On average, the dividend of HPS-A grows each year by 18.01%, which is quite nice.
HPS-A has been paying a dividend for at least 10 years, so it has a reliable track record.
HPS-A has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)18.01%
Div Incr Years3
Div Non Decr Years14
HPS-A.CA Yearly Dividends per shareHPS-A.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8

5.3 Sustainability

HPS-A pays out 14.93% of its income as dividend. This is a sustainable payout ratio.
The dividend of HPS-A is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP14.93%
EPS Next 2Y17.24%
EPS Next 3Y11.84%
HPS-A.CA Yearly Income VS Free CF VS DividendHPS-A.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20M 40M 60M
HPS-A.CA Dividend Payout.HPS-A.CA Dividend Payout, showing the Payout Ratio.HPS-A.CA Dividend Payout.PayoutRetained Earnings

HAMMOND POWER SOLUTIONS INC

TSX:HPS-A (2/7/2025, 7:00:00 PM)

94.53

-4.93 (-4.96%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)10-29 2024-10-29/amc
Earnings (Next)N/A N/A
Inst Owners36.6%
Inst Owner ChangeN/A
Ins Owners2.48%
Ins Owner ChangeN/A
Market Cap863.06M
Analysts83.64
Price Target168.98 (78.76%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1%
Yearly Dividend0.55
Dividend Growth(5Y)18.01%
DP14.93%
Div Incr Years3
Div Non Decr Years14
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.92%
Min EPS beat(2)-13.07%
Max EPS beat(2)9.22%
EPS beat(4)2
Avg EPS beat(4)-5.67%
Min EPS beat(4)-52.52%
Max EPS beat(4)33.69%
EPS beat(8)5
Avg EPS beat(8)13.57%
EPS beat(12)9
Avg EPS beat(12)25.06%
EPS beat(16)12
Avg EPS beat(16)32.78%
Revenue beat(2)1
Avg Revenue beat(2)-2.71%
Min Revenue beat(2)-5.68%
Max Revenue beat(2)0.26%
Revenue beat(4)2
Avg Revenue beat(4)-1.59%
Min Revenue beat(4)-5.68%
Max Revenue beat(4)0.59%
Revenue beat(8)4
Avg Revenue beat(8)-0.66%
Revenue beat(12)8
Avg Revenue beat(12)4.62%
Revenue beat(16)11
Avg Revenue beat(16)3.77%
PT rev (1m)0%
PT rev (3m)-1.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.96%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.7%
Valuation
Industry RankSector Rank
PE 16.58
Fwd PE 12.9
P/S 1.13
P/FCF 32.38
P/OCF 13.82
P/B 3.18
P/tB 3.4
EV/EBITDA 8.07
EPS(TTM)5.7
EY6.03%
EPS(NY)7.33
Fwd EY7.75%
FCF(TTM)2.92
FCFY3.09%
OCF(TTM)6.84
OCFY7.24%
SpS83.99
BVpS29.7
TBVpS27.78
PEG (NY)2
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 14.91%
ROE 24.99%
ROCE 32.72%
ROIC 23.83%
ROICexc 28.45%
ROICexgc 30.56%
OM 12.22%
PM (TTM) 8.84%
GM 33.46%
FCFM 3.48%
ROA(3y)12.26%
ROA(5y)9.93%
ROE(3y)21.64%
ROE(5y)17.57%
ROIC(3y)19.8%
ROIC(5y)N/A
ROICexc(3y)23.84%
ROICexc(5y)N/A
ROICexgc(3y)26.95%
ROICexgc(5y)N/A
ROCE(3y)27.54%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y29.18%
ROICexc growth 3YN/A
ROICexc growth 5Y31.03%
OM growth 3YN/A
OM growth 5Y22.69%
PM growth 3Y26.82%
PM growth 5YN/A
GM growth 3Y8.78%
GM growth 5Y6.99%
F-Score4
Asset Turnover1.69
Health
Industry RankSector Rank
Debt/Equity 0.11
Debt/FCF 1.38
Debt/EBITDA 0.28
Cap/Depr 236.56%
Cap/Sales 4.67%
Interest Coverage 226.37
Cash Conversion 57.38%
Profit Quality 39.34%
Current Ratio 1.97
Quick Ratio 1.19
Altman-Z 6.52
F-Score4
WACC8.91%
ROIC/WACC2.67
Cap/Depr(3y)119.21%
Cap/Depr(5y)96.18%
Cap/Sales(3y)2.05%
Cap/Sales(5y)1.76%
Profit Quality(3y)67.64%
Profit Quality(5y)85.28%
High Growth Momentum
Growth
EPS 1Y (TTM)10.04%
EPS 3Y64.33%
EPS 5YN/A
EPS Q2Q%13.22%
EPS Next Y8.28%
EPS Next 2Y17.24%
EPS Next 3Y11.84%
EPS Next 5YN/A
Revenue 1Y (TTM)14.9%
Revenue growth 3Y30.15%
Revenue growth 5Y17.72%
Sales Q2Q%6.94%
Revenue Next Year11.07%
Revenue Next 2Y11.36%
Revenue Next 3Y10.77%
Revenue Next 5YN/A
EBIT growth 1Y13.69%
EBIT growth 3YN/A
EBIT growth 5Y44.43%
EBIT Next Year70.82%
EBIT Next 3Y24.26%
EBIT Next 5YN/A
FCF growth 1Y-38.34%
FCF growth 3Y16.91%
FCF growth 5Y41.72%
OCF growth 1Y20.54%
OCF growth 3Y30.87%
OCF growth 5Y46.8%