The shares of Textron Inc. (NYSE:TXT) and Equinor ASA (NYSE:EQNR) were among the active stocks of the last trading sessions. Textron Inc. (NYSE:TXT) soared to 1.79% closing at the price of $55.81 whereas the shares of Equinor ASA (NYSE:EQNR) declined -0.51% with the decrease of -0.13 points closing at the price of $25.57. Textron Inc. has currently decrease -14.36% in its stock over the period of 6-months while its rival Equinor ASA subtracted -4.05% 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 Textron Inc. (NYSE:TXT) is 7.8% while the ROI of Equinor ASA (NYSE:EQNR) is 7.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TXT’s EBITDA Margin is 10.95 whereas EQNR’s is 4.33.
Both the profitability ratios suggest that Textron Inc. (NYSE:TXT) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Textron Inc. (NYSE:TXT) reported $0.61/share EPS for the previous quarter where analysts were predicting an EPS to be $0.76/share Thus lagging the analyst Estimates with a Surprise Factor of -19.7 Percent. While, Equinor ASA (NYSE:EQNR) reported EPS of $0.6/share in the last quarter. The analysts projected EPS of $0.56/share depicting a Surprise of 7.1 Percent.
Taking a look at Earnings per Share, Equinor ASA tends to be beating the analyst estimates more than Textron Inc.. so EQNR is more profitable than TXT.
Technical Analysis of Textron Inc. & Equinor ASA
Moving average convergence divergence (MACD) shows that Textron Inc. (NYSE:TXT) is on a PRICE RELATIVITY trend While Equinor ASA (NYSE:EQNR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Textron Inc. was in BULLISH territory and Equinor ASA was in BULLISH territory.
TXT’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While EQNR’s candle is BEARISH with LOW.
EPS Growth Rate: TXT’s 17.3% versus EQNR’s 18.5%
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 Textron Inc. (NYSE:TXT) is predicted at 17.3% while Equinor ASA (NYSE:EQNR) stands at 18.5%. These numbers suggest that EQNR 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 TXT stands at 2.1 while EQNR is at 1.4 whereas the debt ratio of the prior is 0.7 while the debt ratio of the later is 0.62.
The values of the both ratios suggest that TXT 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 1.8 for TXT and 2 for EQNR which means TXT has Buy rating whereas EQNR 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 TXT is $73.83 which is 24.41% of its current price while EQNR has price target of 27.66 which is 7.56% 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.
TXT currently has price to earning P/E ratio of 12.53 whereas EQNR has 12.53 while the forward P/E ratio for the prior stands at 15.73 and for the later it depicts the value of 9.28.
The price to Book P/B for TXT is 2.48, Price to Sale is at 0.97 and for EQNR these ratios stand at 2.03 and 1.17.