The shares of Tutor Perini Corporation (NYSE:TPC) and Louisiana-Pacific Corporation (NYSE:LPX) were among the active stocks of the last trading sessions. Tutor Perini Corporation (NYSE:TPC) declined to -5.12% closing at the price of $17.79 whereas the shares of Louisiana-Pacific Corporation (NYSE:LPX) declined -1.72% with the decrease of -0.42 points closing at the price of $23.99. Tutor Perini Corporation has currently decrease -10.6% in its stock over the period of 6-months while its rival Louisiana-Pacific Corporation subtracted -13.58% 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 Tutor Perini Corporation (NYSE:TPC) is 5.2% while the ROI of Louisiana-Pacific Corporation (NYSE:LPX) is 19.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TPC’s EBITDA Margin is 7.18 whereas LPX’s is 3.18.
Both the profitability ratios suggest a mixed sentiment for Tutor Perini Corporation (NYSE:TPC) and Louisiana-Pacific Corporation (NYSE:LPX).
EPS & Surprise Factor
Tutor Perini Corporation (NYSE:TPC) reported $0.42/share EPS for the previous quarter where analysts were predicting an EPS to be $0.74/share Thus lagging the analyst Estimates with a Surprise Factor of -43.2 Percent. While, Louisiana-Pacific Corporation (NYSE:LPX) reported EPS of $0.83/share in the last quarter. The analysts projected EPS of $0.67/share depicting a Surprise of 23.9 Percent.
Taking a look at Earnings per Share, Louisiana-Pacific Corporation tends to be beating the analyst estimates more than Tutor Perini Corporation. so LPX is more profitable than TPC.
Technical Analysis of Tutor Perini Corporation & Louisiana-Pacific Corporation
Moving average convergence divergence (MACD) shows that Tutor Perini Corporation (NYSE:TPC) is on a PRICE RELATIVITY trend While Louisiana-Pacific Corporation (NYSE:LPX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Tutor Perini Corporation was in BULLISH territory and Louisiana-Pacific Corporation was in BULLISH territory.
TPC’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While LPX’s candle is BEARISH with HIGH.
EPS Growth Rate: TPC’s 10% versus LPX’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 Tutor Perini Corporation (NYSE:TPC) is predicted at 10% while Louisiana-Pacific Corporation (NYSE:LPX) stands at 5%. These numbers suggest that TPC 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 TPC stands at 2 while LPX is at 5.7 whereas the debt ratio of the prior is 0.48 while the debt ratio of the later is 0.21.
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 TPC and 2.2 for LPX which means TPC has Buy rating whereas LPX 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 TPC is $28.83 which is 38.29% of its current price while LPX has price target of 31.22 which is 23.16% 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.
TPC currently has price to earning P/E ratio of 14.11 whereas LPX has 7.31 while the forward P/E ratio for the prior stands at 6.22 and for the later it depicts the value of 10.96.
The price to Book P/B for TPC is 0.51, Price to Sale is at 0.19 and for LPX these ratios stand at 1.96 and 1.17.