Hawkins is a specialty chemical supplier based in Minnesota. They report in three segments: Industrial, Water treatment, and food. It's market cap is around $847 million, and it pays a 1.5% dividend, which has been increased regularly. Their ROE is 18% and ROA 10%. Their debt is manageable.
The industrial segment supplies chemicals to various industries such as agriculture, chemical processing, energy, and pharmaceuticals. The Food segment supplies additives for, well, food. The Water treatment segment is the current growing jewel of the company, and provides chemicals to water treatment plants. This is their fastest growing segment, and they are adding a new treatment plant each year. This is a durable and consistent grower.
The water treatment is the big growth story, and the more plants they add to their clientele, it enhances their network effects, allowing them to realize cost synergies and grow further. They have also been acquiring smaller, local, chemical providers about once a year. This has allowed the company to grow EPS at a 34% CAGR since 2018, and allows for a long runway going forward.
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