Hawkins (NASDAQ:HWKN) pulls back 8.2% this week, but still delivers shareholders favorable 21% CAGR over 3 years

By
Simply Wall St
Published
November 30, 2021
NasdaqGS:HWKN
Source: Shutterstock

It hasn't been the best quarter for Hawkins, Inc. (NASDAQ:HWKN) shareholders, since the share price has fallen 13% in that time. In contrast the stock is up over the last three years. In that time, it is up 66%, which isn't bad, but not amazing either.

While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

See our latest analysis for Hawkins

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Hawkins became profitable within the last three years. So we would expect a higher share price over the period.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NasdaqGS:HWKN Earnings Per Share Growth December 1st 2021

We know that Hawkins has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Hawkins stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Hawkins, it has a TSR of 76% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Hawkins shareholders have received a total shareholder return of 32% over one year. Of course, that includes the dividend. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before deciding if you like the current share price, check how Hawkins scores on these 3 valuation metrics.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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