The Clorox Co (CLX), Hawaiian Electric Industries, Inc. (HE): Income Stocks That Passed Our ‘2-Minute Test’

With a market cap of $2.6 billion, Hawaiian Electric Industries, Inc. (NYSE:HE) is the smallest company of the group. It’s also much less diversified, with its fortunes tied, not surprisingly, to those of Hawaii. The company supplies 95% of the islands’ electricity through its electrical utilities division, which accounts for about two-thirds of Hawaiian Electric Industries, Inc. (NYSE:HE)’s revenue. Hawaiian Electric Industries, Inc. (NYSE:HE)’s banking division — which is one of the state’s largest and accounts for the remaining third of the company’s revenue — has dramatically expanded its mortgage business and reported higher net income in its most recent quarter. The stock is currently a bargain as it’s trading near the midpoint of its 52-week range.

Risks to Consider: Companies can change their dividend policies at any time, and it bears repeating that past performance is not an indication of future results. Both Raytheon Company (NYSE:RTN) and Hawaiian Electric are heavily dependent on single sectors, defense for Raytheon and the Hawaiian economy for Hawaiian Electric. Hawaiian Electric will also likely move in response to its Aug. 8 earnings report.

Action to Take –> Between Raytheon Company (NYSE:RTN) and Hawaiian Electric Industries, Inc. (NYSE:HE), I think I give the edge to Hawaiian Electric for its higher revenue growth and dividend yield. Hawaiian Electric Industries, Inc. (NYSE:HE) also provides a relative bargain entry point, trading now at $27 compared with its 52-week high near $29. In Raytheon Company (NYSE:RTN)’s favor, I don’t see the defense sector shrinking, but with the number of retiring baby boomers on the rise, Hawaii is primed to continue to be a growth region. Plus, imagine the fun of going to visit your “investment.”

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– Bristol Voss

The article 3 Income Stocks That Passed Our ‘2-Minute Test’ originally appeared on StreetAuthority and is written by Bristol Voss.

Bristol Voss does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.