Highwater Ethanol (HEOL) Stock Analysis & Winston Score

Highwater Ethanol is a small company based in Minnesota that produces ethanol, a type of alcohol made from corn. Ethanol is mainly blended into gasoline to help fuel cars and trucks, so the company's primary customers are fuel blenders and distributors in the energy market. It is a single-plant operation, which is common among smaller regional ethanol producers in the U.S. Midwest.

The company makes money by selling ethanol and related co-products like distillers grains, which are sold as animal feed, and corn oil. It operates entirely in the United States, and with a market cap of around $100 million, it is a very small player in the ethanol industry. Profit margins are thin, as seen in its 8.5% gross margin, and the business is heavily exposed to the spread between corn prices and ethanol prices — when corn gets expensive or ethanol prices fall, earnings can drop quickly.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+3.6% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (3%)

Research and development spending

Insider Activity

24.4%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$20M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Highwater Ethanol is growing revenue at 4% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

−0.8% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 5K (2021) → 5K (2025)

Score breakdown

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Quality

Gross Margin

10.2%

Thin — 10.2% gross margin

Operating Margin

6.1%

Modest — 6.1% operating margin

ROCE

2.4%

Weak — 2.4% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+3.3%

Slow sales growth (3.3% YoY)

EPS YoY

+314.1%

Earnings growing fast (314.1% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

80%

Modest — 80% of profit becomes cash

FCF Margin

7.6%

Modest free cash flow (7.6%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.01

Conservative — low debt load (0.01)

Interest Cover

71.57x

Comfortably covers interest (71.6x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

3.7x

Attractive valuation — P/E 3.7

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Dividend Yield

8.24%

Healthy income — 8.24% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth

N/A

no trend

Data not available

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