The shares of Honeywell International Inc. (NYSE:HON) and TD Ameritrade Holding Corporation (NASDAQ:AMTD) were among the active stocks of the last trading sessions. Honeywell International Inc. (NYSE:HON) soared to 0.48% closing at the price of $164.86 whereas the shares of TD Ameritrade Holding Corporation (NASDAQ:AMTD) soared 0.4% with the increase of 0.21 points closing at the price of $53.03. Honeywell International Inc. has currently increase 14.48% in its stock over the period of 6-months while its rival TD Ameritrade Holding Corporation subtracted -11.5% 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 Honeywell International Inc. (NYSE:HON) is 9.6% while the ROI of TD Ameritrade Holding Corporation (NASDAQ:AMTD) is 9.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HON’s EBITDA Margin is 14.93 whereas AMTD’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Honeywell International Inc. (NYSE:HON) and TD Ameritrade Holding Corporation (NASDAQ:AMTD).
EPS & Surprise Factor
Honeywell International Inc. (NYSE:HON) reported $2.12/share EPS for the previous quarter where analysts were predicting an EPS to be $2.01/share Thus beating the analyst Estimates with a Surprise Factor of 5.5 Percent. While, TD Ameritrade Holding Corporation (NASDAQ:AMTD) reported EPS of $0.89/share in the last quarter. The analysts projected EPS of $0.79/share depicting a Surprise of 12.7 Percent.
Taking a look at Earnings per Share, TD Ameritrade Holding Corporation tends to be beating the analyst estimates more than Honeywell International Inc.. so AMTD is more profitable than HON.
Technical Analysis of Honeywell International Inc. & TD Ameritrade Holding Corporation
Moving average convergence divergence (MACD) shows that Honeywell International Inc. (NYSE:HON) is on a PRICE RELATIVITY trend While TD Ameritrade Holding Corporation (NASDAQ:AMTD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Honeywell International Inc. was in BEARISH territory and TD Ameritrade Holding Corporation was in BEARISH territory.
HON’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While AMTD’s candle is BULLISH with LOW.
EPS Growth Rate: HON’s 10.42% versus AMTD’s 30.93%
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 Honeywell International Inc. (NYSE:HON) is predicted at 10.42% while TD Ameritrade Holding Corporation (NASDAQ:AMTD) stands at 30.93%. These numbers suggest that AMTD 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 HON stands at 1.4 while AMTD is at 0 whereas the debt ratio of the prior is 0.97 while the debt ratio of the later is 0.32.
The values of the both ratios suggest that HON 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 1.9 for HON and 2.2 for AMTD which means HON has Buy rating whereas AMTD 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 HON is $178.83 which is 7.81% of its current price while AMTD has price target of 66.83 which is 20.65% 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.
HON currently has price to earning P/E ratio of 38.05 whereas AMTD has 25.76 while the forward P/E ratio for the prior stands at 18.64 and for the later it depicts the value of 13.45.
The price to Book P/B for HON is 6.98, Price to Sale is at 2.91 and for AMTD these ratios stand at 3.8 and 6.01.