The shares of Hecla Mining Company (NYSE:HL) and United Technologies Corporation (NYSE:UTX) were among the active stocks of the last trading sessions. Hecla Mining Company (NYSE:HL) soared to 0.82% closing at the price of $2.45 whereas the shares of United Technologies Corporation (NYSE:UTX) soared 0.61% with the increase of 0.79 points closing at the price of $131.34. Hecla Mining Company has currently decrease -37.66% in its stock over the period of 6-months while its rival United Technologies Corporation added 5.51% 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 Hecla Mining Company (NYSE:HL) is 0.7% while the ROI of United Technologies Corporation (NYSE:UTX) is 11.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HL’s EBITDA Margin is 7.27 whereas UTX’s is 11.59.
Both the profitability ratios suggest that United Technologies Corporation (NYSE:UTX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Hecla Mining Company (NYSE:HL) reported $-0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.03/share Thus lagging the analyst Estimates with a Surprise Factor of -100 Percent. While, United Technologies Corporation (NYSE:UTX) reported EPS of $1.93/share in the last quarter. The analysts projected EPS of $1.82/share depicting a Surprise of 6 Percent.
Taking a look at Earnings per Share, United Technologies Corporation tends to be beating the analyst estimates more than Hecla Mining Company. so UTX is more profitable than HL.
Technical Analysis of Hecla Mining Company & United Technologies Corporation
Moving average convergence divergence (MACD) shows that Hecla Mining Company (NYSE:HL) is on a PRICE RELATIVITY trend While United Technologies Corporation (NYSE:UTX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Hecla Mining Company was in BULLISH territory and United Technologies Corporation was in BULLISH territory.
HL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While UTX’s candle is BULLISH with HIGH.
EPS Growth Rate: HL’s 0% versus UTX’s 8.65%
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 Hecla Mining Company (NYSE:HL) is predicted at 0% while United Technologies Corporation (NYSE:UTX) stands at 8.65%. These numbers suggest that UTX 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 HL stands at 3.3 while UTX is at 1.5 whereas the debt ratio of the prior is 0.37 while the debt ratio of the later is 1.24.
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 2.8 for HL and 2.1 for UTX which means HL has Hold rating whereas UTX 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 HL is $3.97 which is 38.29% of its current price while UTX has price target of 150.41 which is 12.68% 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.
HL currently has price to earning P/E ratio of 0 whereas UTX has 18.36 while the forward P/E ratio for the prior stands at 44.55 and for the later it depicts the value of 16.88.
The price to Book P/B for HL is 0.65, Price to Sale is at 1.97 and for UTX these ratios stand at 3.24 and 1.64.