The shares of ABB Ltd (NYSE:ABB) and Unisys Corporation (NYSE:UIS) were among the active stocks of the last trading sessions. ABB Ltd (NYSE:ABB) declined to -0.71% closing at the price of $22.48 whereas the shares of Unisys Corporation (NYSE:UIS) declined -2.27% with the decrease of -0.45 points closing at the price of $19.37. ABB Ltd has currently decrease -2.13% in its stock over the period of 6-months while its rival Unisys Corporation added 81.88% 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 ABB Ltd (NYSE:ABB) is 11.5% while the ROI of Unisys Corporation (NYSE:UIS) is 5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ABB’s EBITDA Margin is 11.51 whereas UIS’s is 4.09.
Both the profitability ratios suggest that ABB Ltd (NYSE:ABB) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
ABB Ltd (NYSE:ABB) reported $0.38/share EPS for the previous quarter where analysts were predicting an EPS to be $0.35/share Thus beating the analyst Estimates with a Surprise Factor of 8.6 Percent. While, Unisys Corporation (NYSE:UIS) reported EPS of $0.39/share in the last quarter. The analysts projected EPS of $0.18/share depicting a Surprise of 116.7 Percent.
Taking a look at Earnings per Share, Unisys Corporation tends to be beating the analyst estimates more than ABB Ltd. so UIS is more profitable than ABB.
Technical Analysis of ABB Ltd & Unisys Corporation
Moving average convergence divergence (MACD) shows that ABB Ltd (NYSE:ABB) is on a PRICE RELATIVITY trend While Unisys Corporation (NYSE:UIS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ABB Ltd was in BEARISH territory and Unisys Corporation was in BEARISH territory.
ABB’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While UIS’s candle is BEARISH with MEDIUM.
EPS Growth Rate: ABB’s 6.2% versus UIS’s 9%
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 ABB Ltd (NYSE:ABB) is predicted at 6.2% while Unisys Corporation (NYSE:UIS) stands at 9%. These numbers suggest that UIS 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 ABB stands at 1.2 while UIS is at 1.5 whereas the debt ratio of the prior is 0.77 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.
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 ABB and 2.5 for UIS which means ABB has Hold rating whereas UIS 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 ABB is $23.56 which is 4.58% of its current price while UIS has price target of 17.5 which is -10.69% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
ABB currently has price to earning P/E ratio of 21.74 whereas UIS has 135.45 while the forward P/E ratio for the prior stands at 14.66 and for the later it depicts the value of 10.56.
The price to Book P/B for ABB is 3.51, Price to Sale is at 1.39 and for UIS these ratios stand at 0 and 0.35.