The shares of Banco Santander, S.A. (NYSE:SAN) and Halliburton Company (NYSE:HAL) were among the active stocks of the last trading sessions. Banco Santander, S.A. (NYSE:SAN) soared to 1.2% closing at the price of $5.04 whereas the shares of Halliburton Company (NYSE:HAL) soared 0.02% with the increase of 0.01 points closing at the price of $42.01. Banco Santander, S.A. has currently decrease -23.98% in its stock over the period of 6-months while its rival Halliburton Company subtracted -13.95% 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 Banco Santander, S.A. (NYSE:SAN) is 6.8% while the ROI of Halliburton Company (NYSE:HAL) is 5.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SAN’s EBITDA Margin is NOT AVAILABLE whereas HAL’s is 10.37.
Both the profitability ratios suggest that Banco Santander, S.A. (NYSE:SAN) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of Banco Santander, S.A. & Halliburton Company
Moving average convergence divergence (MACD) shows that Banco Santander, S.A. (NYSE:SAN) is on a PRICE RELATIVITY trend While Halliburton Company (NYSE:HAL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Banco Santander, S.A. was in BEARISH territory and Halliburton Company was in BULLISH territory.
SAN’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While HAL’s candle is BULLISH with LOW.
EPS Growth Rate: SAN’s 8.64% versus HAL’s 44.7%
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 Banco Santander, S.A. (NYSE:SAN) is predicted at 8.64% while Halliburton Company (NYSE:HAL) stands at 44.7%. These numbers suggest that HAL 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 SAN stands at 0 while HAL is at 2.2 whereas the debt ratio of the prior is 2.41 while the debt ratio of the later is 1.23.
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 3 for SAN and 1.8 for HAL which means SAN has Hold rating whereas HAL has Buy 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 SAN is $6.49 which is 22.34% of its current price while HAL has price target of 51.5 which is 18.43% 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.
SAN currently has price to earning P/E ratio of 10.39 whereas HAL has 41.55 while the forward P/E ratio for the prior stands at 8.97 and for the later it depicts the value of 16.84.
The price to Book P/B for SAN is 0.75, Price to Sale is at 1.31 and for HAL these ratios stand at 4.18 and 1.58.