The shares of Hanesbrands Inc. (NYSE:HBI) and Mylan N.V. (NASDAQ:MYL) were among the active stocks of the last trading sessions. Hanesbrands Inc. (NYSE:HBI) soared to 1.28% closing at the price of $17.41 whereas the shares of Mylan N.V. (NASDAQ:MYL) soared 0.06% with the increase of 0.02 points closing at the price of $35.31. Hanesbrands Inc. has currently decrease -7.44% in its stock over the period of 6-months while its rival Mylan N.V. subtracted -14.96% 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 Hanesbrands Inc. (NYSE:HBI) is 15.2% while the ROI of Mylan N.V. (NASDAQ:MYL) is 4.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HBI’s EBITDA Margin is 9.91 whereas MYL’s is 9.15.
Both the profitability ratios suggest that Hanesbrands Inc. (NYSE:HBI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Hanesbrands Inc. (NYSE:HBI) reported $0.45/share EPS for the previous quarter where analysts were predicting an EPS to be $0.46/share Thus lagging the analyst Estimates with a Surprise Factor of -2.2 Percent. While, Mylan N.V. (NASDAQ:MYL) reported EPS of $1.07/share in the last quarter. The analysts projected EPS of $1.22/share depicting a Surprise of -12.3 Percent.
Taking a look at Earnings per Share, Hanesbrands Inc. tends to be beating the analyst estimates more than Mylan N.V.. so HBI is more profitable than MYL.
Technical Analysis of Hanesbrands Inc. & Mylan N.V.
Moving average convergence divergence (MACD) shows that Hanesbrands Inc. (NYSE:HBI) is on a PRICE RELATIVITY trend While Mylan N.V. (NASDAQ:MYL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Hanesbrands Inc. was in BEARISH territory and Mylan N.V. was in BEARISH territory.
HBI’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While MYL’s candle is BULLISH with MEDIUM.
EPS Growth Rate: HBI’s 0.7% versus MYL’s 7.84%
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 Hanesbrands Inc. (NYSE:HBI) is predicted at 0.7% while Mylan N.V. (NASDAQ:MYL) stands at 7.84%. These numbers suggest that MYL 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 HBI stands at 2 while MYL is at 1.3 whereas the debt ratio of the prior is 5.86 while the debt ratio of the later is 1.21.
The values of the both ratios suggest that HBI is more suitable investment when the liquidity and risk is the main concern.
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 2.5 for HBI and 2.1 for MYL which means HBI has Hold rating whereas MYL 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 HBI is $21 which is 17.1% of its current price while MYL has price target of 46.53 which is 24.11% 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.
HBI currently has price to earning P/E ratio of 12.83 whereas MYL has 32.04 while the forward P/E ratio for the prior stands at 9.21 and for the later it depicts the value of 6.75.
The price to Book P/B for HBI is 8.21, Price to Sale is at 0.95 and for MYL these ratios stand at 1.49 and 1.59.