The shares of Iamgold Corporation (NYSE:IAG) and Hanesbrands Inc. (NYSE:HBI) were among the active stocks of the last trading sessions. Iamgold Corporation (NYSE:IAG) soared to 5.61% closing at the price of $3.95 whereas the shares of Hanesbrands Inc. (NYSE:HBI) declined -2.82% with the decrease of -0.47 points closing at the price of $16.17. Iamgold Corporation has currently decrease -29.21% in its stock over the period of 6-months while its rival Hanesbrands Inc. subtracted -10.81% 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 Iamgold Corporation (NYSE:IAG) is 14.5% while the ROI of Hanesbrands Inc. (NYSE:HBI) is 15.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, IAG’s EBITDA Margin is 4.02 whereas HBI’s is 9.91.
Both the profitability ratios suggest that Hanesbrands Inc. (NYSE:HBI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Iamgold Corporation (NYSE:IAG) reported $-0.03/share EPS for the previous quarter where analysts were predicting an EPS to be $0.02/share Thus lagging the analyst Estimates with a Surprise Factor of -250 Percent. While, Hanesbrands Inc. (NYSE:HBI) reported EPS of $0.45/share in the last quarter. The analysts projected EPS of $0.46/share depicting a Surprise of -2.2 Percent.
Taking a look at Earnings per Share, Hanesbrands Inc. tends to be beating the analyst estimates more than Iamgold Corporation. so HBI is more profitable than IAG.
Technical Analysis of Iamgold Corporation & Hanesbrands Inc.
Moving average convergence divergence (MACD) shows that Iamgold Corporation (NYSE:IAG) is on a PRICE RELATIVITY trend While Hanesbrands Inc. (NYSE:HBI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Iamgold Corporation was in BULLISH territory and Hanesbrands Inc. was in BEARISH territory.
IAG’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While HBI’s candle is BEARISH with HIGH.
EPS Growth Rate: IAG’s 3% versus HBI’s 0.7%
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 Iamgold Corporation (NYSE:IAG) is predicted at 3% while Hanesbrands Inc. (NYSE:HBI) stands at 0.7%. These numbers suggest that IAG 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 IAG stands at 4.7 while HBI is at 2 whereas the debt ratio of the prior is 0.14 while the debt ratio of the later is 5.86.
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 2.2 for IAG and 2.5 for HBI which means IAG has Hold rating whereas HBI 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 IAG is $7.65 which is 48.37% of its current price while HBI has price target of 21 which is 23% 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.
IAG currently has price to earning P/E ratio of 64.75 whereas HBI has 11.92 while the forward P/E ratio for the prior stands at 23.65 and for the later it depicts the value of 8.55.
The price to Book P/B for IAG is 0.66, Price to Sale is at 1.6 and for HBI these ratios stand at 7.63 and 0.88.