The shares of BorgWarner Inc. (NYSE:BWA) and Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) were among the active stocks of the last trading sessions. BorgWarner Inc. (NYSE:BWA) declined to -0.2% closing at the price of $40.14 whereas the shares of Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) soared 1% with the increase of 0.13 points closing at the price of $13.07. BorgWarner Inc. has currently decrease -20.69% in its stock over the period of 6-months while its rival Boston Private Financial Holdings, Inc. subtracted -21.74% 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 BorgWarner Inc. (NYSE:BWA) is 13% while the ROI of Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) is 23.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, BWA’s EBITDA Margin is 5.6 whereas BPFH’s is NOT AVAILABLE.
Both the profitability ratios suggest that Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
BorgWarner Inc. (NYSE:BWA) reported $1/share EPS for the previous quarter where analysts were predicting an EPS to be $0.99/share Thus beating the analyst Estimates with a Surprise Factor of 1 Percent. While, Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) reported EPS of $0.25/share in the last quarter. The analysts projected EPS of $0.23/share depicting a Surprise of 8.7 Percent.
Taking a look at Earnings per Share, Boston Private Financial Holdings, Inc. tends to be beating the analyst estimates more than BorgWarner Inc.. so BPFH is more profitable than BWA.
Technical Analysis of BorgWarner Inc. & Boston Private Financial Holdings, Inc.
Moving average convergence divergence (MACD) shows that BorgWarner Inc. (NYSE:BWA) is on a PRICE RELATIVITY trend While Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the BorgWarner Inc. was in BULLISH territory and Boston Private Financial Holdings, Inc. was in BEARISH territory.
BWA’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While BPFH’s candle is BULLISH with HIGH.
EPS Growth Rate: BWA’s 7.45% versus BPFH’s 10.18%
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 BorgWarner Inc. (NYSE:BWA) is predicted at 7.45% while Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) stands at 10.18%. These numbers suggest that BPFH 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 BWA stands at 1.7 while BPFH is at 0 whereas the debt ratio of the prior is 0.53 while the debt ratio of the later is 0.15.
The values of the both ratios suggest that BWA 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 2.2 for BWA and 3 for BPFH which means BWA has Hold rating whereas BPFH 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 BWA is $49.56 which is 19.01% of its current price while BPFH has price target of 14.96 which is 12.63% 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.
BWA currently has price to earning P/E ratio of 10.42 whereas BPFH has 34.49 while the forward P/E ratio for the prior stands at 8.63 and for the later it depicts the value of 12.97.
The price to Book P/B for BWA is 2.05, Price to Sale is at 0.81 and for BPFH these ratios stand at 1.49 and 3.88.