The shares of Banco Santander Brasil SA (NYSE:BSBR) and Honeywell International Inc. (NYSE:HON) were among the active stocks of the last trading sessions. Banco Santander Brasil SA (NYSE:BSBR) soared to 0.18% closing at the price of $11.35 whereas the shares of Honeywell International Inc. (NYSE:HON) declined -0.26% with the decrease of -0.37 points closing at the price of $144.45. Banco Santander Brasil SA has currently increase 11.02% in its stock over the period of 6-months while its rival Honeywell International Inc. added 4.85% 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 Banco Santander Brasil SA (NYSE:BSBR) is 10.4% while the ROI of Honeywell International Inc. (NYSE:HON) is 9.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, BSBR’s EBITDA Margin is NOT AVAILABLE whereas HON’s is 13.18.
Both the profitability ratios suggest that Banco Santander Brasil SA (NYSE:BSBR) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Banco Santander Brasil SA (NYSE:BSBR) reported $0.21/share EPS for the previous quarter where analysts were predicting an EPS to be $0.22/share Thus lagging the analyst Estimates with a Surprise Factor of -4.5 Percent. While, Honeywell International Inc. (NYSE:HON) reported EPS of $2.03/share in the last quarter. The analysts projected EPS of $1.99/share depicting a Surprise of 2 Percent.
Taking a look at Earnings per Share, Honeywell International Inc. tends to be beating the analyst estimates more than Banco Santander Brasil SA. so HON is more profitable than BSBR.
Technical Analysis of Banco Santander Brasil SA & Honeywell International Inc.
Moving average convergence divergence (MACD) shows that Banco Santander Brasil SA (NYSE:BSBR) is on a PRICE RELATIVITY trend While Honeywell International Inc. (NYSE:HON) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Banco Santander Brasil SA was in BULLISH territory and Honeywell International Inc. was in BEARISH territory.
BSBR’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While HON’s candle is BEARISH with HIGH.
EPS Growth Rate: BSBR’s 17.3% versus HON’s 6.41%
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 Banco Santander Brasil SA (NYSE:BSBR) is predicted at 17.3% while Honeywell International Inc. (NYSE:HON) stands at 6.41%. These numbers suggest that BSBR 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 BSBR stands at 0 while HON is at 1.5 whereas the debt ratio of the prior is 0.9 while the debt ratio of the later is 1.
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 3.3 for BSBR and 1.8 for HON which means BSBR has Sell rating whereas HON 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 BSBR is $9.65 which is -17.62% of its current price while HON has price target of 173.67 which is 16.83% 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.
BSBR currently has price to earning P/E ratio of 15.11 whereas HON has 25.36 while the forward P/E ratio for the prior stands at 12.57 and for the later it depicts the value of 18.06.
The price to Book P/B for BSBR is 1.78, Price to Sale is at 2.26 and for HON these ratios stand at 5.87 and 2.52.