Hennessy Advisors, Inc. Reports 7% Increase in Quarterly Earnings Per Share and Announces Quarterly Dividend

Rhea-AI Summary

Hennessy Advisors, Inc. (HNNA) reported strong financial results for the first fiscal quarter of 2024, with an increase in total revenue, net income, and earnings per share. The firm also declared a quarterly dividend of $0.1375 per share, representing an annualized dividend yield of 8.3%. The company's total assets under management increased by 9% compared to the prior year, and cash and cash equivalents also saw a significant rise of 15%. The market performance in 2023 was robust, with all 17 Hennessy Funds producing positive returns and the S&P 500® Index returning 26.29% and the Dow Jones Industrial Average returning 16.18% for the year. The CEO expressed confidence in the corporate profits, cash flow, and the U.S. consumer's participation in economic growth. The company's investment products were recognized for their strong performance in industry journals, further highlighting their success.

Insights

Financial Analyst

Examining Hennessy Advisors, Inc.'s financial performance reveals a stable revenue stream with a marginal 0.0% change in total revenue. However, the firm's ability to increase net income by 7.2% and diluted earnings per share by 6.7% suggests effective cost management and operational efficiency. The 9% growth in total assets under management indicates robust fund performance and potentially increased investor confidence. This growth, coupled with a significant 15% increase in cash position net of debt, underscores a strong balance sheet and may signal financial resilience and strategic liquidity management.

The annualized dividend yield of 8.3% is notably high, which could attract income-focused investors, especially in a market where interest rates are flattening. This yield, based on the closing stock price, represents a substantial return on investment, assuming the dividend is sustainable. Investors should consider the firm's long-term track record, with all funds over ten years old showing positive returns over five- and ten-year periods, which may be indicative of consistent fund management and investment strategy success.

Market Research Analyst

The backdrop of a strong market in 2023, with the S&P 500 Index and the Dow Jones Industrial Average posting significant returns, has likely contributed to the positive performance of Hennessy Advisors' funds. Recognition in industry journals further validates the funds' competitive performance and could enhance the firm's reputation among potential clients and investors. The firm's focus on consistent distribution and marketing, along with its pursuit of attractive acquisition opportunities, suggests a proactive approach to growth and market share expansion.

Investors should monitor the firm's strategic moves, especially in acquisitions, as these could significantly impact future performance and market positioning. The commitment to distribution may also imply a continued emphasis on shareholder returns, which is a critical factor in investment decisions. The positive mentions in industry journals can serve as third-party endorsements, potentially influencing investor perceptions and investment inflows.

Economist

The announcement by Hennessy Advisors, Inc. reflects a broader economic environment where inflation is slightly falling and employment data is positive. The firm's performance amidst these conditions may be indicative of how well it can leverage economic trends to benefit investors. The flattening of interest rates, as mentioned by the CEO, could have implications for the investment management industry, as it may affect investor preferences between debt and equity securities.

Long-term positive returns across the firm's funds suggest a resilience to economic cycles, which can be reassuring to investors concerned about volatility. However, stakeholders should remain vigilant about macroeconomic shifts, such as changes in inflation and employment trends that could affect market dynamics and, consequently, the performance of investment funds.

NOVATO, Calif., Feb. 8, 2024 /PRNewswire/ -- Hennessy Advisors, Inc. (Nasdaq: HNNA) reported results for its first fiscal quarter of 2024, which ended December 31, 2023. The firm also announced a quarterly dividend of $0.1375 per share to be paid on March 4, 2024, to shareholders of record as of February 20, 2024, which represents an annualized dividend yield of 8.3%.*

"The markets and our economy were strong in 2023 as inflation fell slightly, employment data was positive, and interest rates flattened," said Neil Hennessy, Chairman and CEO. "I strongly believe that corporate profits and cash flow remain healthy, and that the U.S. consumer is still participating in our economic growth in a meaningful way."

"2023 market performance did not disappoint, with the S&P 500^® Index returning 26.29% and the Dow Jones Industrial Average returning 16.18% for the year ended December 31, 2023. The backdrop of a strong market helped every one of our 17 Hennessy Funds produce positive returns for calendar year 2023. However, it is the longer-term performance of our products that makes me most proud. All 16 of our funds over ten years old had positive returns for both the five- and ten-year periods ended December 31, 2023," said Neil Hennessy. "I'm also pleased to share the following three mentions of our Funds' performances in industry journals from the first two weeks of January 2024."

• On January 8, 2024, the Wall Street Journal announced its Category Kings in 18 Realms. The Hennessy Cornerstone Mid Cap 30 was ranked 5^th in the Small-Cap Core category with 12-month performance through December 31, 2023, of 31.3%.
  
  
• Lawrence C. Strauss. (January 4, 2024). Japan is Hot. Here are the Best Funds to Play It. Barron's. The Hennessy Japan Fund is ranked 9^th in the article.
  
  
• Are these 3 Top-Ranked Mutual Funds in Your Retirement Portfolio? (January 1, 2024). Zacks Equity Research. The Hennessy Cornerstone Mid Cap 30 Fund is named in the article.

"Our investment products performed well during the quarter ended December 31, 2023, as evidenced by a 9% increase in total assets under management versus the prior comparable period," said Teresa Nilsen, President, and COO. "We continue to increase our cash position net of debt, which is up over 15% in the last twelve months," she added. "We remain focused on consistent distribution and marketing, and we are committed to our search for attractive acquisition opportunities as we head into calendar 2024 and beyond."

Summary Highlights (compared to the prior comparable quarter ended December 31, 2022):

• Total revenue of $6.1 million.
• Net income of $1.2 million, an increase of 7%.
• Fully diluted earnings per share of $0.16, an increase of 7%.
• Average assets under management, upon which revenue is earned, of $3.0 billion.
• Total assets under management of $3.3 billion, an increase of 9%.
• Cash and cash equivalents, net of gross debt, of $19.4 million, an increase of 15%.

		Three Months Ended December 31,				Change
		2023		2022		Dollar		Percent
Total Revenue		$           6,143,843		$           6,144,863		$             (1,020)		0.0 %
Net Income		1,200,095		1,119,100		80,995		7.2 %
Earnings Per Share (Diluted)		0.16		0.15		0.01		6.7 %
Weighted Average Number of Shares Outstanding (Diluted)		7,673,688		7,581,157		92,531		1.2 %
Average Fund Assets Under Management		3,038,241,860		3,044,246,652		(6,004,792)		-0.2 %
		As of December 31,
		2023		2022
Total Fund Assets Under Management		$     3,280,372,061		$     3,009,457,663		$     270,914,398		9.0 %
Cash and Cash Equivalents, Net of Gross Debt Balance		19,355,225		16,800,396		2,554,829		15.2 %
* Based on the closing stock price of $6.60 on February 7, 2024, and an annualized dividend of $0.55 per share.

About Hennessy Advisors, Inc.
Hennessy Advisors, Inc. is a publicly traded investment manager offering a broad range of domestic equity, multi-asset, and sector and specialty funds. Hennessy Advisors, Inc. is committed to providing superior service to shareholders and employing a consistent and disciplined approach to investing based on a buy‑and‑hold philosophy that rejects the idea of market timing.

Supplemental Information
Nothing in this press release shall be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

Forward-Looking Statements
This press release contains "forward-looking statements" for which Hennessy Advisors, Inc. claims the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. Forward‑looking statements relate to expectations and projections about future events based on currently available information. Forward‑looking statements are not a guarantee of future performance or results and are not necessarily accurate indications of the times at which, or means by which, such performance or results may be achieved. Forward‑looking statements are subject to risks, uncertainties, and assumptions, including those described in the sections entitled "Risk Factors" and elsewhere in the reports that Hennessy Advisors, Inc. files with the Securities and Exchange Commission. Unforeseen developments could cause actual performance or results to differ substantially from those expressed in, or suggested by, the forward‑looking statements. Hennessy Advisors, Inc. management does not assume responsibility for the accuracy or completeness of the forward-looking statements and undertakes no responsibility to update any such statement after the date of this press release to conform to actual results or to changes in expectations.

View original content:https://www.prnewswire.com/news-releases/hennessy-advisors-inc-reports-7-increase-in-quarterly-earnings-per-share-and-announces-quarterly-dividend-302057871.html

SOURCE Hennessy Advisors, Inc.

FAQ

What is the annualized dividend yield for Hennessy Advisors, Inc. (HNNA)?

The annualized dividend yield for Hennessy Advisors, Inc. (HNNA) is 8.3%.

How did the market perform in 2023?

The market performance in 2023 was strong, with the S&P 500® Index returning 26.29% and the Dow Jones Industrial Average returning 16.18% for the year.

What was the increase in total assets under management for Hennessy Advisors, Inc. (HNNA) compared to the prior year?

The total assets under management for Hennessy Advisors, Inc. (HNNA) increased by 9% compared to the prior year.

What was the percentage increase in cash and cash equivalents for Hennessy Advisors, Inc. (HNNA) in the last twelve months?

The cash and cash equivalents for Hennessy Advisors, Inc. (HNNA) saw a significant increase of 15% in the last twelve months.

How did the company's investment products perform during the quarter ended December 31, 2023?

The company's investment products performed well during the quarter ended December 31, 2023, with a 9% increase in total assets under management versus the prior comparable period.