The shares of W&T Offshore, Inc. (NYSE:WTI) and Fortune Brands Home & Security, Inc. (NYSE:FBHS) were among the active stocks of the last trading sessions. W&T Offshore, Inc. (NYSE:WTI) declined to -3.05% closing at the price of $7.64 whereas the shares of Fortune Brands Home & Security, Inc. (NYSE:FBHS) declined -2.98% with the decrease of -1.43 points closing at the price of $46.63. W&T Offshore, Inc. has currently increase 36.92% in its stock over the period of 6-months while its rival Fortune Brands Home & Security, Inc. subtracted -18.34% 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 W&T Offshore, Inc. (NYSE:WTI) is 56.4% while the ROI of Fortune Brands Home & Security, Inc. (NYSE:FBHS) is 12.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WTI’s EBITDA Margin is 6.75 whereas FBHS’s is 9.93.
Both the profitability ratios suggest a mixed sentiment for W&T Offshore, Inc. (NYSE:WTI) and Fortune Brands Home & Security, Inc. (NYSE:FBHS).
EPS & Surprise Factor
W&T Offshore, Inc. (NYSE:WTI) reported $0.29/share EPS for the previous quarter where analysts were predicting an EPS to be $0.19/share Thus beating the analyst Estimates with a Surprise Factor of 52.6 Percent. While, Fortune Brands Home & Security, Inc. (NYSE:FBHS) reported EPS of $1/share in the last quarter. The analysts projected EPS of $1.02/share depicting a Surprise of -2 Percent.
Taking a look at Earnings per Share, W&T Offshore, Inc. tends to be beating the analyst estimates more than Fortune Brands Home & Security, Inc.. so WTI is more profitable than FBHS.
Technical Analysis of W&T Offshore, Inc. & Fortune Brands Home & Security, Inc.
Moving average convergence divergence (MACD) shows that W&T Offshore, Inc. (NYSE:WTI) is on a PRICE RELATIVITY trend While Fortune Brands Home & Security, Inc. (NYSE:FBHS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the W&T Offshore, Inc. was in BEARISH territory and Fortune Brands Home & Security, Inc. was in BEARISH territory.
WTI’s current statistics gauge that the stock candle is NEUTRAL with MEDIUM volatility. While FBHS’s candle is BEARISH with HIGH.
EPS Growth Rate: WTI’s 0% versus FBHS’s 12.55%
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 W&T Offshore, Inc. (NYSE:WTI) is predicted at 0% while Fortune Brands Home & Security, Inc. (NYSE:FBHS) stands at 12.55%. These numbers suggest that FBHS 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 WTI stands at 0.8 while FBHS is at 1.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.99.
The values of the both ratios suggest that FBHS 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 3 for WTI and 2.4 for FBHS which means WTI has Hold rating whereas FBHS 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 WTI is $7.58 which is -0.79% of its current price while FBHS has price target of 64.87 which is 28.12% 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.
WTI currently has price to earning P/E ratio of 5.51 whereas FBHS has 16.05 while the forward P/E ratio for the prior stands at 10.47 and for the later it depicts the value of 11.22.
The price to Book P/B for WTI is 0, Price to Sale is at 2 and for FBHS these ratios stand at 3.11 and 1.24.