I loved chemistry class in high school.
We got to light stuff on fire! (Juvenile, I know, but give me a break — I was in high school.)
I also liked learning about elements that make up common products — the many chemicals in the foods we eat and cleaning products.
Just look at a label of any product you use.
We use a lot of chemicals, folks!
And that usage is growing:
As you can see in the chart above, the chemicals industry is a big business in the U.S.
By 2025, the value of chemicals shipped from U.S. companies should increase 16%.
The bottom line is that the use of chemicals is growing...
And today’s Power Stock is a leader in developing and distributing chemicals worldwide: Hawkins Inc. (Nasdaq: HWKN).
Hawkins develops and distributes chemicals every day, such as:
- Hydrogen peroxide (think: antiseptic).
- Calcium chloride (i.e., preservatives for canned vegetables).
- Sodium bisulfate (chemicals to make paper and dyes).
It also makes chemicals for residential pools, as well as ingredients for dietary supplements.
Hawkins stock scores a “Strong Bullish” 98 out of 100 on our Stock Power Ratings system, and we expect it to beat the broader market by 3X in the next 12 months.
HWKN Stock: Green Across the Board
Here’s what stood out after my deep dive into HWKN stock:
- During its last fiscal year, HWKN registered $774.5 million in annual sales — that’s a 30% year-over-year increase!
- The company’s gross profit for the year was $59.6 million — up 31% from the previous fiscal year.
Hawkins’ quality is strong — it rates an 89 on our quality metric.
The stock’s return on equity of 18.2% supports this. Contrast that with the specialty chemicals sector’s average — negative 1.2% — and it’s even clearer.
Its operating margin is 9.6%, while the sector average is negative 9%.
From May 2021 to March 2022, HWKN stock climbed 49% to hit its 52-week high.
As the chart above shows, it fell 28.8% in April and May but remains up 10.7% from a year ago — 4X better than its specialty and performance chemicals peers for the last 12 months.
Hawkins Inc. stock scores a 98 overall on our proprietary Stock Power Ratings system.
That means we’re “Strong Bullish” and expect it to beat the broader market by at least three times in the next 12 months.
Hawkins produces and sells products that are in demand no matter the economic conditions.
I think this demand will continue for years, making HWKN an excellent contender for a spot in your portfolio.
Bonus: HWKN’s forward dividend yield of 1.6% means the company will pay you $0.56 per share, per year just to own the stock.
Stay Tuned: Major Retailer to Buy
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify!
Stay tuned for the next issue, where I’ll share all the details on a retail stock that’s set to surge.
Matt Clark, CMSA®
Research Analyst, Money & Markets
P.S. Got a comment about Stock Power Daily? Reach my team and me anytime at Feedback@MoneyandMarkets.com.