Hyster-Yale, Inc. has undergone a make-over, at least in terms of its name, which in June 2024, was shortened by chopping off ‘materials handling’. The longer moniker was somewhat misleading as the Company designs, manufactures and markets lift trucks that perform materials handling rather than moving the materials around for customers. The Company also produces aftermarket parts for both its own lift trucks and those sold by competitors. We also note that the Hyster-Yale product line includes hydrogen fuel cell stacks and engines.
The market has endorsed Hyster-Yale products and services, allowing the Company to deliver top-line growth in each of the last five years. The Company reported $4.3 billion in total sales in the twelve months ending June 2024, providing $286.7 million in operating income. Operations generated $125.8 million in total cash flow during the period, representing a 3% sales-to-cash conversion rate. Working capital needs have been a drag on operating cash flow as management has paid down current liabilities,
Leverage has been an important element in the Hyster-Yale growth story. The debt-to-equity ratio was 6.22 at the end of June 2024. It is noteworthy that return on invested capital is near 17.0% based on the most recent financial achievements. With an estimate cost of capital near 10.5%, the Company delivers an impressive 6.5% excess returns to stakeholders.
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