Hawaiian Electric Stock Could Offer Decent Upside With Little Risk

Hawaiian Electric Stock Could Offer Decent Upside With Little Risk

Hawaiian Electric Industries stock - Hawaii's primary electric utility company - has risen by about 14% year-to-date, considerably underperforming the S&P 500 which remains up by about 29% over the same period. Although Hawaiian Electric's financial performance has been reasonably strong, with revenue rising by about 9% over the first three quarters of this year, utility stocks, which are seen as safe havens of sorts, have underperformed as economic growth rebounds strongly with bond yields also rising. That said, we think that Hawaiian Electric stock has further upside from current levels. The stock still remains down by about 25% from the pre-Covid peak and could have about 33% upside it recovers to these levels. We think this is a real possibility for a couple of reasons. Demand for the company is tied, to an extent, to Hawaii's tourism industry and things are certainly looking up on this front. For instance, total tourist arrivals this month via flight were up by almost 3x versus last year, although the number remains down by about 20% from 2019 levels. The higher arrivals should, in turn, drive up commercial and industrial demand for electricity, which took a hit in 2020. [1] Separately, the company's