The shares of Fluor Corporation (NYSE:FLR) and Range Resources Corporation (NYSE:RRC) were among the active stocks of the last trading sessions. Fluor Corporation (NYSE:FLR) declined to -17.24% closing at the price of $46.53 whereas the shares of Range Resources Corporation (NYSE:RRC) declined -4.1% with the decrease of -0.71 points closing at the price of $16.6. Fluor Corporation has currently decrease -19.67% in its stock over the period of 6-months while its rival Range Resources Corporation added 13.39% 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 Fluor Corporation (NYSE:FLR) is 6.9% while the ROI of Range Resources Corporation (NYSE:RRC) is -0.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FLR’s EBITDA Margin is 10.67 whereas RRC’s is 8.89.
Both the profitability ratios suggest that Fluor Corporation (NYSE:FLR) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Fluor Corporation (NYSE:FLR) reported $0.81/share EPS for the previous quarter where analysts were predicting an EPS to be $0.71/share Thus beating the analyst Estimates with a Surprise Factor of 14.1 Percent. While, Range Resources Corporation (NYSE:RRC) reported EPS of $0.2/share in the last quarter. The analysts projected EPS of $0.11/share depicting a Surprise of 81.8 Percent.
Taking a look at Earnings per Share, Range Resources Corporation tends to be beating the analyst estimates more than Fluor Corporation. so RRC is more profitable than FLR.
Technical Analysis of Fluor Corporation & Range Resources Corporation
Moving average convergence divergence (MACD) shows that Fluor Corporation (NYSE:FLR) is on a PRICE RELATIVITY trend While Range Resources Corporation (NYSE:RRC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Fluor Corporation was in BEARISH territory and Range Resources Corporation was in BULLISH territory.
FLR’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While RRC’s candle is BEARISH with MEDIUM.
EPS Growth Rate: FLR’s 44.53% versus RRC’s 60.33%
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 Fluor Corporation (NYSE:FLR) is predicted at 44.53% while Range Resources Corporation (NYSE:RRC) stands at 60.33%. These numbers suggest that RRC 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 FLR stands at 1.5 while RRC is at 0.5 whereas the debt ratio of the prior is 0.54 while the debt ratio of the later is 0.73.
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 2.4 for FLR and 2.4 for RRC which means FLR has Hold rating whereas RRC 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 FLR is $61.14 which is 23.9% of its current price while RRC has price target of 20.94 which is 20.73% 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.
FLR currently has price to earning P/E ratio of 20.01 whereas RRC has 0 while the forward P/E ratio for the prior stands at 13.25 and for the later it depicts the value of 14.9.
The price to Book P/B for FLR is 2.15, Price to Sale is at 0.33 and for RRC these ratios stand at 0.71 and 1.51.