Here's Why We Think Haverty Furniture Companies (NYSE:HVT) Might Deserve Your Attention Today

Published
August 09, 2022
NYSE:HVT
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It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like Haverty Furniture Companies (NYSE:HVT), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

Check out our latest analysis for Haverty Furniture Companies

How Fast Is Haverty Furniture Companies Growing Its Earnings Per Share?

In the last three years Haverty Furniture Companies' earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. It's good to see that Haverty Furniture Companies' EPS has grown from US$4.69 to US$5.49 over twelve months. There's little doubt shareholders would be happy with that 17% gain. It also seems the company is in good financial health, since it has boosted EPS by buying back shares.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Haverty Furniture Companies remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 7.7% to US$1.0b. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

earnings-and-revenue-history
NYSE:HVT Earnings and Revenue History August 9th 2022

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Haverty Furniture Companies Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Haverty Furniture Companies followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at US$45m. That's a lot of money, and no small incentive to work hard. As a percentage, this totals to 9.0% of the shares on issue for the business, an appreciable amount considering the market cap.

Does Haverty Furniture Companies Deserve A Spot On Your Watchlist?

As previously touched on, Haverty Furniture Companies is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. The combination definitely favoured by investors so consider keeping the company on a watchlist. However, before you get too excited we've discovered 4 warning signs for Haverty Furniture Companies (2 can't be ignored!) that you should be aware of.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Valuation is complex, but we're helping make it simple.

Find out whether Haverty Furniture Companies is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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