Performance Comparison of Johnson Controls International plc (JCI) and Masco Corporation (MAS)

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The shares of Johnson Controls International plc (NYSE:JCI) and Masco Corporation (NYSE:MAS) were among the active stocks of the last trading sessions. Johnson Controls International plc (NYSE:JCI) declined to -0.16% closing at the price of $36.31 whereas the shares of Masco Corporation (NYSE:MAS) declined -0.86% with the decrease of -0.31 points closing at the price of $35.82. Johnson Controls International plc has currently increase 9.17% in its stock over the period of 6-months while its rival Masco Corporation subtracted -10.94% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Johnson Controls International plc (NYSE:JCI) is 6.9% while the ROI of Masco Corporation (NYSE:MAS) is 27.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, JCI’s EBITDA Margin is 9.39 whereas MAS’s is 11.05.

Both the profitability ratios suggest that Masco Corporation (NYSE:MAS) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Johnson Controls International plc (NYSE:JCI) reported $0.81/share EPS for the previous quarter where analysts were predicting an EPS to be $0.79/share Thus beating the analyst Estimates with a Surprise Factor of 2.5 Percent. While, Masco Corporation (NYSE:MAS) reported EPS of $0.75/share in the last quarter. The analysts projected EPS of $0.77/share depicting a Surprise of -2.6 Percent.

Taking a look at Earnings per Share, Johnson Controls International plc tends to be beating the analyst estimates more than Masco Corporation. so JCI is more profitable than MAS.

Technical Analysis of Johnson Controls International plc & Masco Corporation

Moving average convergence divergence (MACD) shows that Johnson Controls International plc (NYSE:JCI) is on a PRICE RELATIVITY trend While Masco Corporation (NYSE:MAS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Johnson Controls International plc was in BULLISH territory and Masco Corporation was in BEARISH territory.

JCI’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While MAS’s candle is BEARISH with HIGH.

EPS Growth Rate: JCI’s 8.65% versus MAS’s 14.77%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Johnson Controls International plc (NYSE:JCI) is predicted at 8.65% while Masco Corporation (NYSE:MAS) stands at 14.77%. These numbers suggest that MAS is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of JCI stands at 1.1 while MAS is at 1.7 whereas the debt ratio of the prior is 0.58 while the debt ratio of the later is 0.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.8 for JCI and 2.1 for MAS which means JCI has Hold rating whereas MAS has Hold rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for JCI is $39.87 which is 8.93% of its current price while MAS has price target of 46.78 which is 23.43% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

JCI currently has price to earning P/E ratio of 13.73 whereas MAS has 19.5 while the forward P/E ratio for the prior stands at 11.98 and for the later it depicts the value of 12.34.

The price to Book P/B for JCI is 1.62, Price to Sale is at 1.08 and for MAS these ratios stand at 0 and 1.38.