The shares of Honeywell International Inc. (NYSE:HON) and HighPoint Resources Corporation (NYSE:HPR) were among the active stocks of the last trading sessions. Honeywell International Inc. (NYSE:HON) soared to 0.23% closing at the price of $150.55 whereas the shares of HighPoint Resources Corporation (NYSE:HPR) declined -4.9% with the decrease of -0.23 points closing at the price of $4.46. Honeywell International Inc. has currently increase 6.71% in its stock over the period of 6-months while its rival HighPoint Resources Corporation subtracted -27.83% 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 HighPoint Resources Corporation (NYSE:HPR) is -6%. 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 HPR’s is 12.48.
Both the profitability ratios suggest that Honeywell International Inc. (NYSE:HON) is more suitable investment in terms of profitability and return.
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, HighPoint Resources Corporation (NYSE:HPR) reported EPS of $0.01/share in the last quarter. The analysts projected EPS of $0.02/share depicting a Surprise of -50 Percent.
Taking a look at Earnings per Share, Honeywell International Inc. tends to be beating the analyst estimates more than HighPoint Resources Corporation. so HON is more profitable than HPR.
Technical Analysis of Honeywell International Inc. & HighPoint Resources Corporation
Moving average convergence divergence (MACD) shows that Honeywell International Inc. (NYSE:HON) is on a PRICE RELATIVITY trend While HighPoint Resources Corporation (NYSE:HPR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Honeywell International Inc. was in BULLISH territory and HighPoint Resources Corporation was in BULLISH territory.
HON’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While HPR’s candle is BEARISH with HIGH.
EPS Growth Rate: HON’s 6.41% versus HPR’s 31%
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 HighPoint Resources Corporation (NYSE:HPR) stands at 31%. These numbers suggest that HPR 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 HPR is at 0.5 whereas the debt ratio of the prior is 1 while the debt ratio of the later is 0.63.
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 1.9 for HPR which means HON has Buy rating whereas HPR 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 HON is $173.1 which is 13.03% of its current price while HPR has price target of 8.75 which is 49.03% 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 26.44 whereas HPR has 0 while the forward P/E ratio for the prior stands at 18.83 and for the later it depicts the value of 5.77.
The price to Book P/B for HON is 6.12, Price to Sale is at 2.6 and for HPR these ratios stand at 0.95 and 2.2.