In today’s market, there are thousands of options and companies to invest in. It can be difficult deciding where to place your hard earned money. One ways investors look to find the optimal investment is by looking at value. Value is simply looking at two stocks, and finding which one has the most room to run up compared to the other. First, you have to choose your companies, Textron Inc. and L3 Technologies, Inc.. Then you need to ensure that they are in the same or similar sector. Textron Inc. (TXT) and L3 Technologies, Inc. (LLL) are in Industrial Goods and Industrial Goods respectively.
Starting with the P/E ratio, Textron Inc. (TXT) has a P/E ratio of 26.7 and (LLL) has a P/E ratio of 23.22. The lesser the ratio the more value it may have compared to the other. Looking further, the Forward P/E ratio for TXT is 18.23 and L3 Technologies, Inc.(LLL) is 18.33. This will tell you where each company is headed.
Going further, the dividend yield for Textron Inc. is 0.0012 and for L3 Technologies, Inc. is 0.0157. A dividend yield is a sign that the company is in good health and can repay investors. Also, it will help mitigate some risk as it has a steady yield. In order to sustain the dividend yield, we’ll want to compare debt to equity. The debt to equity for Textron Inc.(LLL) is 0.69 and for LLL is . Cash on hand for Textron Inc. is 20.7 and for L3 Technologies, Inc. is 42.49, compare that with 24.94 and 33.45 respectively, this will help determine if the dividend yield can continue.
Taking a look at the technical health, Textron Inc. (TXT) has a 200-day simple moving average of 11.37% and L3 Technologies, Inc. (LLL) has an average of 2.16%. Comparing that the price of $66.44 for Textron Inc. and $203.21 for L3 Technologies, Inc., you can gauge how overbought or oversold the company is. You can also look at the 52-week high, which is for TXT and for (LLL).
Other important numbers you need to look at include the price target. The current price target for Textron Inc. (TXT) is $65.69 and for L3 Technologies, Inc. (LLL) is $237.73. Comparing that to the current price of $66.44 and $203.21 respectively, you can determine how much potential value is left.
A few other numbers you can look at include the year to date performance. This will tell you if the stock has been pushed down or not, giving you a place to start. The current year to date performance for Textron Inc. is 17.41% and for L3 Technologies, Inc. is 2.71%. You can go smaller on the time frames but for long term investors, looking at the year to date should be sufficient.
Being able to compare equities allows you to find value and put your money to work. Between Textron Inc. and L3 Technologies, Inc., you now have an idea which one may be at a discount and can provide greater returns. Value investing has lead to some solid returns, but it takes time to look at all aspects of the company. The work may be difficult, by the rewards can make it all worthwhile.