By Rob Otman
Halliburton (NYSE: HAL) is a large cap company that operates within the energy equipment and services industry. Its market cap is $39 billion today, and the total one-year return is 3.46% for shareholders.
Halliburton stock is underperforming the market. It’s beaten down, but it reports earnings next week. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✓ Earnings-per-Share (EPS) Growth: Halliburton reported a recent EPS growth rate of 98.58%. That’s above the energy equipment and services industry average of 58.5%. That’s a great sign. Halliburton’s earnings growth is outpacing that of its competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the energy equipment and services industry is 182.29. And Halliburton’s ratio comes in at 113.77. It’s trading at a better value than many of its competitors.
✗ Debt-to-Equity: The debt-to-equity ratio for Halliburton stock is 121.36%. That’s above the energy equipment and services industry average of 67.51%. That’s not a good sign. Halliburton’s debt levels should be lower.
✓ Free Cash Flow per Share Growth: Halliburton’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of Halliburton comes in at -0.75% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Halliburton’s profit margin is above the energy equipment and services average of -4.08%. So that’s a positive indicator for investors.
✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Halliburton is -30.80%, and that’s below its industry average ROE of -9.77%.
Halliburton stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more
Source:: Investment You
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