The case for & against
Bull & Bear analysis
Hawaiian Electric Industries (HEI) (NYSE: HE) is a prominent utility holding company that provides electricity across Hawaii, specifically catering to Oahu, Maui, Lanai, and Molokai. The company operates in a critical position in Hawaii's energy landscape, focusing on sustainable energy solutions amid regulatory changes and environmental risks, particularly following significant challenges from the Maui wildfires in 2023. HEI is pursuing its long-term goals for a cleaner energy future, aiming for 100% renewable portfolio standards by 2045, positioning itself as a key player in the energy transition theme.
Bull says
- ↑Q1 2026 net income rose to $30.5M (18¢/share) vs. $26.7M, with $437M liquidity
- ↑Senate Bill 897 secures wildfire liability caps and approval for liability securitization
- ↑Moody’s upgraded HEI to BA1, boosting credit outlook one notch below investment grade
- ↑2026 CapEx guidance of $550–$700M focuses on wildfire mitigation and grid resilience
- ↑High earnings yield and strong book-to-price ratio suggest potential undervaluation
- ↑Dividend yield of ~0.3% sustains shareholder returns amid heavy investment
Bear says
- ↓Annual $479M Maui settlement payments weigh heavily on cash flows
- ↓O&M expenses projected to rise well above inflation amid mitigation efforts
- ↓Negative profitability factors and downgrading analyst revisions signal earnings pressure
- ↓PUC scrutiny of proposed 5.3% rate increase may delay revenue relief
- ↓High interest-rate sensitivity could elevate debt costs and constrain cash flow
- ↓Low institutional ownership and elevated leverage heighten financing and volatility risks
Investment themes with HE
Stocks with high short interest ratios
Stocks with highest short interest
Companies paying above-average dividends
Earnings Call · Q1 2026 · Mgmt. Guidance
Transcript signals
Bull points
- This marks a pivotal milestone for those who were impacted by the Maui wildfires and our hearts are with them as they continue on their journey of healing and recovery.
- As we prepare to enter our second multi-year rate period, Paul will discuss our expectations for 2026 in more detail.
- we expect 2026 to be a year of transition now that we've reached the pivotal milestones of finalizing the tort litigation settlement and launching our alternative rate rebasing process.
Bear points
- The decrease in utility net income primarily reflects higher O&M expenses from the quarter's severe weather.
- Interest expense was also higher compared to last year due to the 500 million high yield debt issuance last September.
- we do expect higher O&M in 2026 as we progress through a year of transition ahead of our rate rebasing.