The shares of Honeywell International Inc. (NYSE:HON) and Welltower Inc. (NYSE:WELL) were among the active stocks of the last trading sessions. Honeywell International Inc. (NYSE:HON) soared to 1.18% closing at the price of $150.2 whereas the shares of Welltower Inc. (NYSE:WELL) declined -0.03% with the decrease of -0.02 points closing at the price of $69.1. Honeywell International Inc. has currently increase 6.5% in its stock over the period of 6-months while its rival Welltower Inc. added 23.09% 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 Honeywell International Inc. (NYSE:HON) is 9.8% while the ROI of Welltower Inc. (NYSE:WELL) is 3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HON’s EBITDA Margin is 13.18 whereas WELL’s is 18.41.
Both the profitability ratios suggest a mixed sentiment for Honeywell International Inc. (NYSE:HON) and Welltower Inc. (NYSE:WELL).
EPS & Surprise Factor
Honeywell International Inc. (NYSE:HON) reported $2.03/share EPS for the previous quarter where analysts were predicting an EPS to be $1.99/share Thus beating the analyst Estimates with a Surprise Factor of 2 Percent. While, Welltower Inc. (NYSE:WELL) reported EPS of $0.17/share in the last quarter. The analysts projected EPS of $0.5/share depicting a Surprise of -66 Percent.
Taking a look at Earnings per Share, Honeywell International Inc. tends to be beating the analyst estimates more than Welltower Inc.. so HON is more profitable than WELL.
Technical Analysis of Honeywell International Inc. & Welltower Inc.
Moving average convergence divergence (MACD) shows that Honeywell International Inc. (NYSE:HON) is on a PRICE RELATIVITY trend While Welltower Inc. (NYSE:WELL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Honeywell International Inc. was in BULLISH territory and Welltower Inc. was in BULLISH territory.
HON’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WELL’s candle is BEARISH with HIGH.
EPS Growth Rate: HON’s 6.41% versus WELL’s 15.5%
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 Honeywell International Inc. (NYSE:HON) is predicted at 6.41% while Welltower Inc. (NYSE:WELL) stands at 15.5%. These numbers suggest that WELL 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 HON stands at 1.5 while WELL is at 0 whereas the debt ratio of the prior is 1 while the debt ratio of the later is 0.99.
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 1.8 for HON and 2.6 for WELL which means HON has Buy rating whereas WELL 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 HON is $173.1 which is 13.23% of its current price while WELL has price target of 66.16 which is -4.44% 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.
HON currently has price to earning P/E ratio of 26.37 whereas WELL has 226.56 while the forward P/E ratio for the prior stands at 18.78 and for the later it depicts the value of 41.3.
The price to Book P/B for HON is 6.11, Price to Sale is at 2.6 and for WELL these ratios stand at 1.9 and 5.83.