The shares of Hecla Mining Company (NYSE:HL) and Northern Oil and Gas, Inc. (NYSE:NOG) were among the active stocks of the last trading sessions. Hecla Mining Company (NYSE:HL) declined to -1.04% closing at the price of $2.85 whereas the shares of Northern Oil and Gas, Inc. (NYSE:NOG) declined -1.23% with the decrease of -0.05 points closing at the price of $4.01. Hecla Mining Company has currently decrease -21.27% in its stock over the period of 6-months while its rival Northern Oil and Gas, Inc. added 157.05% 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 Hecla Mining Company (NYSE:HL) is 0.7% while the ROI of Northern Oil and Gas, Inc. (NYSE:NOG) is 12.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HL’s EBITDA Margin is 7.57 whereas NOG’s is 15.59.
Both the profitability ratios suggest that Northern Oil and Gas, Inc. (NYSE:NOG) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of Hecla Mining Company & Northern Oil and Gas, Inc.
Moving average convergence divergence (MACD) shows that Hecla Mining Company (NYSE:HL) is on a PRICE RELATIVITY trend While Northern Oil and Gas, Inc. (NYSE:NOG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Hecla Mining Company was in BULLISH territory and Northern Oil and Gas, Inc. was in BULLISH territory.
HL’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While NOG’s candle is BULLISH with LOW.
EPS Growth Rate: HL’s 0% versus NOG’s 5%
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 Hecla Mining Company (NYSE:HL) is predicted at 0% while Northern Oil and Gas, Inc. (NYSE:NOG) stands at 5%. These numbers suggest that NOG 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 HL stands at 3.3 while NOG is at 1.7 whereas the debt ratio of the prior is 0.37 while the debt ratio of the later is 0.
The values of the both ratios suggest that HL 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 2.7 for HL and 2 for NOG which means HL has Hold rating whereas NOG 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 HL is $4.06 which is 29.8% of its current price while NOG has price target of 5.17 which is 22.44% 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.
HL currently has price to earning P/E ratio of 0 whereas NOG has 0 while the forward P/E ratio for the prior stands at 43.18 and for the later it depicts the value of 6.54.
The price to Book P/B for HL is 0.76, Price to Sale is at 2.33 and for NOG these ratios stand at 0 and 5.7.