Are Organic Earnings Worth More?

Hain Celestial Group (HAIN), the New York-based natural and organic foods company, and seller of Celestial Seasonings teas, wrapped up its fiscal year in June and announced the results this Wednesday. Net sales rose 22.3% for the year to $1.4 billion, net income rose 44% to $79.2 million. Investors were pleased as pesticide-free punch.

HAIN Chart

HAIN data by YCharts

So what’s not to like about a fast-growing company that sells healthy food for a healthy profit? For one thing, profit hasn’t kept up with revenues.

HAIN Revenue TTM Chart

HAIN Revenue TTM data by YCharts

YCharts Pro considers the stock considerably overvalued. It doesn’t pay a dividend, and its cash pile has shrunk to $41 million. It’s also not generating much cash.

HAIN Free Cash Flow Yield Chart

HAIN Free Cash Flow Yield data by YCharts

But its PE is skyrocketing, making it a more expensive stock than more prosaic brands like Kraft (KFT) and General Mills. (GIS)

HAIN PE Ratio Chart

HAIN PE Ratio data by YCharts

Consumers may be willing to pay extra for more natural food, but investors may prefer theirs with chemicals.

From the editors of YCharts.YCharts Pro Investor Service includes professional stock charts, stock ratings and portfolio strategies.



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