The shares of Halliburton Company (NYSE:HAL) and Western Digital Corporation (NASDAQ:WDC) were among the active stocks of the last trading sessions. Halliburton Company (NYSE:HAL) soared to 0.37% closing at the price of $34.9 whereas the shares of Western Digital Corporation (NASDAQ:WDC) soared 1.4% with the increase of 0.66 points closing at the price of $47.74. Halliburton Company has currently decrease -32.92% in its stock over the period of 6-months while its rival Western Digital Corporation subtracted -39.2% 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 Halliburton Company (NYSE:HAL) is 5.2% while the ROI of Western Digital Corporation (NASDAQ:WDC) is 16.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HAL’s EBITDA Margin is 9.08 whereas WDC’s is 3.8.
Both the profitability ratios suggest a mixed sentiment for Halliburton Company (NYSE:HAL) and Western Digital Corporation (NASDAQ:WDC).
EPS & Surprise Factor
Halliburton Company (NYSE:HAL) reported $0.5/share EPS for the previous quarter where analysts were predicting an EPS to be $0.49/share Thus beating the analyst Estimates with a Surprise Factor of 2 Percent. While, Western Digital Corporation (NASDAQ:WDC) reported EPS of $3.04/share in the last quarter. The analysts projected EPS of $3.04/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Halliburton Company tends to be beating the analyst estimates more than Western Digital Corporation. so HAL is more profitable than WDC.
Technical Analysis of Halliburton Company & Western Digital Corporation
Moving average convergence divergence (MACD) shows that Halliburton Company (NYSE:HAL) is on a PRICE RELATIVITY trend While Western Digital Corporation (NASDAQ:WDC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Halliburton Company was in BEARISH territory and Western Digital Corporation was in BEARISH territory.
HAL’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While WDC’s candle is BULLISH with HIGH.
EPS Growth Rate: HAL’s 35.35% versus WDC’s -2.7%
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 Halliburton Company (NYSE:HAL) is predicted at 35.35% while Western Digital Corporation (NASDAQ:WDC) stands at -2.7%. These numbers suggest that HAL 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 HAL stands at 2.3 while WDC is at 2.4 whereas the debt ratio of the prior is 1.16 while the debt ratio of the later is 0.97.
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 1.8 for HAL and 2.3 for WDC which means HAL has Buy rating whereas WDC 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 HAL is $49.21 which is 29.08% of its current price while WDC has price target of 72.2 which is 33.88% 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.
HAL currently has price to earning P/E ratio of 32.08 whereas WDC has 7.38 while the forward P/E ratio for the prior stands at 16.04 and for the later it depicts the value of 5.64.
The price to Book P/B for HAL is 3.4, Price to Sale is at 1.27 and for WDC these ratios stand at 1.24 and 0.67.