The shares of Frontier Communications Corporation (NASDAQ:FTR) and Hess Corporation (NYSE:HES) were among the active stocks of the last trading sessions. Frontier Communications Corporation (NASDAQ:FTR) soared to 4.99% closing at the price of $5.26 whereas the shares of Hess Corporation (NYSE:HES) soared 0.03% with the increase of 0.02 points closing at the price of $58.66. Frontier Communications Corporation has currently decrease -41.94% in its stock over the period of 6-months while its rival Hess Corporation subtracted -5.92% 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 Frontier Communications Corporation (NASDAQ:FTR) is -5.5% while the ROI of Hess Corporation (NYSE:HES) is -19.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FTR’s EBITDA Margin is 5.05 whereas HES’s is 10.51.
Both the profitability ratios suggest a mixed sentiment for Frontier Communications Corporation (NASDAQ:FTR) and Hess Corporation (NYSE:HES).
EPS & Surprise Factor
Technical Analysis of Frontier Communications Corporation & Hess Corporation
Moving average convergence divergence (MACD) shows that Frontier Communications Corporation (NASDAQ:FTR) is on a PRICE RELATIVITY trend While Hess Corporation (NYSE:HES) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Frontier Communications Corporation was in BULLISH territory and Hess Corporation was in BEARISH territory.
FTR’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While HES’s candle is BEARISH with MEDIUM.
EPS Growth Rate: FTR’s 7.3% versus HES’s 0%
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 Frontier Communications Corporation (NASDAQ:FTR) is predicted at 7.3% while Hess Corporation (NYSE:HES) stands at 0%. These numbers suggest that FTR 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 FTR stands at 0.5 while HES is at 2.4 whereas the debt ratio of the prior is 7.26 while the debt ratio of the later is 0.65.
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 3.5 for FTR and 2.5 for HES which means FTR has Sell rating whereas HES 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 FTR is $6.37 which is 17.43% of its current price while HES has price target of 75.29 which is 22.09% 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.
FTR currently has price to earning P/E ratio of 0 whereas HES has 0 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 33.14.
The price to Book P/B for FTR is 0.17, Price to Sale is at 0.06 and for HES these ratios stand at 1.75 and 2.84.