Heath (Samuel) & Sons (HSM) AI Stock Analysis

• Market Cap: £8.62M
• Dividend Yield: 3.84%
• Average Volume (3M): 422.00
• Price to Earnings (P/E): 8.5
• Beta (1Y): -0.13
• Revenue Growth: -0.57%
• EPS Growth: 32.71%
• Country: UK
• Employees: 136
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 0.21
• Shares Outstanding: 2,534,322
• 10 Day Avg. Volume: 910
• 30 Day Avg. Volume: 422
• PEG Ratio: 0.53
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 9.82
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: 381.00p ▲(12.06% Upside)

Heath (Samuel) & Sons scores well due to its strong valuation and positive technical indicators. The company's low leverage and efficient cost management contribute positively, although challenges in revenue growth and profitability margins are noted. The recent dividend approval further supports investor confidence.

Positive Factors

Strong Balance Sheet

A strong balance sheet with minimal leverage provides financial stability and flexibility, enabling the company to invest in growth opportunities and weather economic downturns.

Cash Generation Ability

Strong cash generation relative to profits indicates efficient operations, providing the company with the liquidity needed to fund investments and manage obligations.

Efficient Cost Management

Efficient cost management helps maintain profitability and competitive pricing, supporting long-term financial health and market competitiveness.

Negative Factors

Declining Revenue Growth

Declining revenue growth indicates potential difficulties in market expansion and product demand, which could impact future profitability and market position.

Reduced Profitability Margins

Reduced profitability margins can limit reinvestment in business growth and innovation, potentially affecting competitive advantage and shareholder returns.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests challenges in converting profits into cash, which may constrain the company's ability to invest in growth and meet financial obligations.

Heath (Samuel) & Sons Business Overview & Revenue Model

Company Description

Samuel Heath & Sons plc engages in the manufacture and marketing of various products in the builders' hardware and bathroom field in the United Kingdom. It offers basic ancillaries and taps; bath ancillaries and taps; bathroom accessories; bidet taps; concealed showers; cupboards/cabinets; exposed showers; external and internal doors; further fittings; generic roughs; kitchen taps; shower accessories and ancillaries; toilet fittings; and windows. The company also exports its products. Samuel Heath & Sons plc was founded in 1820 and is headquartered in Birmingham, the United Kingdom.

How the Company Makes Money

Heath (Samuel) & Sons generates revenue through multiple streams, including direct sales to consumers via their online platform and physical retail locations, as well as wholesale distribution to various retailers. The company capitalizes on its established brand reputation and loyal customer base to drive sales. Additionally, HSM has formed strategic partnerships with eco-friendly suppliers and local artisans, enhancing its product offerings while also tapping into niche markets that prioritize sustainability. Seasonal promotions and limited-edition product launches further contribute to revenue, along with a growing focus on e-commerce, which has expanded its reach and accessibility to a broader audience.

Heath (Samuel) & Sons Financial Statement Overview

Summary

Heath (Samuel) & Sons demonstrates solid financial stability with low leverage and efficient cost management. However, declining revenue growth and profitability margins pose challenges. The company needs to focus on enhancing revenue streams and improving free cash flow to sustain long-term growth.

Income Statement

Heath (Samuel) & Sons shows a stable gross profit margin around 46%, indicating efficient cost management. However, the net profit margin has declined to 6% from a peak of 10.5% in 2022, reflecting reduced profitability. Revenue growth is negative at -1.55%, suggesting challenges in expanding sales. The EBIT and EBITDA margins have improved slightly, indicating better operational efficiency compared to the previous year.

Balance Sheet

The company maintains a strong balance sheet with a very low debt-to-equity ratio of 0.016, indicating minimal leverage and financial risk. The return on equity has decreased to 7.2% from 19.2% in 2022, suggesting reduced profitability for shareholders. The equity ratio remains healthy, reflecting a strong capital structure.

Cash Flow

Operating cash flow has improved significantly, but free cash flow growth is negative at -21.1%, indicating potential cash management issues. The operating cash flow to net income ratio is strong at 0.84, suggesting good cash generation relative to profits. However, the free cash flow to net income ratio is moderate at 0.51, indicating room for improvement in cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.92M	14.77M	15.24M	14.72M	14.02M	11.54M
Gross Profit	6.96M	6.84M	6.94M	6.77M	7.04M	4.97M
EBITDA	2.06M	1.93M	1.58M	1.70M	2.57M	1.20M
Net Income	1.02M	888.00K	768.00K	931.00K	1.47M	393.00K
Balance Sheet
Total Assets	15.23M	15.27M	15.01M	14.21M	14.70M	13.84M
Cash, Cash Equivalents and Short-Term Investments	2.62M	2.17M	1.68M	2.72M	4.41M	3.68M
Total Debt	171.00K	202.00K	85.00K	118.00K	191.00K	55.00K
Total Liabilities	2.71M	2.96M	2.83M	3.02M	7.02M	8.22M
Stockholders Equity	12.52M	12.30M	12.18M	11.19M	7.68M	5.62M
Cash Flow
Free Cash Flow	1.08M	800.00K	-713.00K	-1.29M	1.05M	683.00K
Operating Cash Flow	1.57M	1.58M	137.00K	233.00K	1.80M	931.00K
Investing Cash Flow	-446.00K	-670.00K	-849.00K	-1.45M	-727.00K	-206.00K
Financing Cash Flow	-408.00K	-407.00K	-376.00K	-389.00K	-360.00K	-59.00K

Heath (Samuel) & Sons Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 340.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HSM, the sentiment is Positive. The current price of 340 is below the 20-day moving average (MA) of 340.00, above the 50-day MA of 340.00, and above the 200-day MA of 321.52, indicating a neutral trend. The MACD of 0.17 indicates Positive momentum. The RSI at 59.11 is Neutral, neither overbought nor oversold. The STOCH value of 64.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:HSM.

Heath (Samuel) & Sons Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXR	74 Outperform	£285.14M	22.53	10.01%	3.48%	-3.93%	41.83%
HSM	74 Outperform	£8.62M	8.46	8.12%	3.84%	-0.57%	32.71%
ECEL	70 Neutral	£129.25M	17.49	7.23%	3.97%	5.51%	-33.75%
ALU	66 Neutral	£91.22M	9.83	25.06%	4.63%	12.60%	6.64%
SRAD	65 Neutral	£175.11M	34.72	9.50%	4.39%	-3.51%	-67.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TON	52 Neutral	£10.97M	-3.40	-11.61%	―	-27.62%	-228.90%

Heath (Samuel) & Sons Corporate Events

Samuel Heath & Sons PLC Reports Modest Growth Amid Economic Challenges

Samuel Heath & Sons PLC reported a modest increase in sales and operating profit for the first half of 2025, despite challenges such as increased national insurance contributions and tariffs on US sales. The company is facing a tougher economic environment in its key markets, leading to reduced headcount and cost-cutting measures in anticipation of weaker sales in the second half of the year. New product finishes have been well-received, and a collaboration with designer Laura Hammett is expected to boost future sales.

The most recent analyst rating on (GB:HSM) stock is a Buy with a £374.00 price target. To see the full list of analyst forecasts on Heath (Samuel) & Sons stock, see the GB:HSM Stock Forecast page.