The shares of Halliburton Company (NYSE:HAL) and Sprint Corporation (NYSE:S) were among the active stocks of the last trading sessions. Halliburton Company (NYSE:HAL) declined to -2.86% closing at the price of $35.37 whereas the shares of Sprint Corporation (NYSE:S) declined -1.88% with the decrease of -0.12 points closing at the price of $6.26. Halliburton Company has currently decrease -32.35% in its stock over the period of 6-months while its rival Sprint Corporation added 21.32% 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 Sprint Corporation (NYSE:S) is 3.9%. 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 S’s is 4.83.
Both the profitability ratios suggest that Halliburton Company (NYSE:HAL) is more suitable investment in terms of profitability and return.
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, Sprint Corporation (NYSE:S) reported EPS of $0.05/share in the last quarter. The analysts projected EPS of $-0.01/share depicting a Surprise of 600 Percent.
Taking a look at Earnings per Share, Sprint Corporation tends to be beating the analyst estimates more than Halliburton Company. so S is more profitable than HAL.
Technical Analysis of Halliburton Company & Sprint Corporation
Moving average convergence divergence (MACD) shows that Halliburton Company (NYSE:HAL) is on a PRICE RELATIVITY trend While Sprint Corporation (NYSE:S) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Halliburton Company was in BULLISH territory and Sprint Corporation was in BULLISH territory.
HAL’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While S’s candle is NEUTRAL with HIGH.
EPS Growth Rate: HAL’s 35.35% versus S’s 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 Halliburton Company (NYSE:HAL) is predicted at 35.35% while Sprint Corporation (NYSE:S) stands at 5%. 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 S is at 1.2 whereas the debt ratio of the prior is 1.16 while the debt ratio of the later is 1.46.
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 3.1 for S which means HAL has Buy rating whereas S has Sell 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 28.12% of its current price while S has price target of 5.78 which is -8.3% 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 32.51 whereas S has 52.17 while the forward P/E ratio for the prior stands at 16.25 and for the later it depicts the value of 0.
The price to Book P/B for HAL is 3.45, Price to Sale is at 1.29 and for S these ratios stand at 0.9 and 0.78.