Analysis: Apple (AAPL) :Rated as First
Apple Company is a well established technology company and well recognized brand all over the world. It was founded in 1977. Some of its most successful products are the iphone, ipad, Apple TV, and Mac computers. Almost everyone in the world has or wants to have the latest products produced yearly by this company. Their revenue not only comes from producing electronic devices, they also have applications, music subscriptions, video, and software that is not only easy to use but very productive.
A recent report by Reuters announced that Apple is buying “critical iPhone technology in $600 million Dialog deal”. Dialog Semiconductor is an Anglo-German chip maker that apparently will enable Apple to improve their battery management and more. The deal is explained as providing not only patents but also a good size workforce of engineers. This is evidence that Apple is actively securing their supply chain and re-investing their capital to be more profitable in coming years. A comparable company would be Sony Electronics (SNE) which now has a Beta: 0.72 (lower than AAPL) and PE Ratio: 12.73 (lower than AAPL) the yield is 0.33% which is lower than AAPL at 1.3%. The Beta measures the volatility of a stock in the past so although Sony seems a “safer” investment, the PE Ratio denotes the expected growth or overpricing of a stock. In this case AAPL because of its increasing growth seems better positioned for a better investment. I would probably recommend buying the stock now even though there may not be any new products to be announced until next year because the recent release of the iPhone X S,R are just a glimmer of what we can expect Apple to do in the coming years.
Summary: I would rank Apple (AAPL) as the highest of the three I selected because of its brand strength, built trust and proven value over many years. I analyzed that just looking at one section of available information is not enough to determine whether a stock is a good investment or not. Especially in the case of Apple. It’s Beta may seem to make it more volatile than the market. I would like to learn more about other investments the company is doing aside from its core business of electronics, software and it’s chain supply.
Analysis: United Rentals (URI) :Rated as Second
United Rentals, Inc. was founded on September 1997, and is now considered the largest construction equipment in North America. Any job that governmental entities, municipalities, private or public construction companies in the United States or Canada will undertake more than likely will have to use United Rental’s services or products. What makes this company so unique is that it fills a tremendous need for light to heavy duty machines which sometimes will be used in construction sites for a brief period. No company would buy an expensive machine and keep up with its maintenance cost and storage when a rental is convenient and available. The website: forconstructionpros.com reported on September 26th, 2018 the following headline “United Rentals Receives Innovation Award for Mobile Water Treatment Solutions”. The article indicates that United Rentals is credited for product innovation for mobile water and wastewater treatment. This award provides evidence of the company’s effort to come up with innovative solutions to specific needs that many local governments will for sure use. With an increase in natural disasters and population growth a company that invests in areas that impact the environment are for sure to be very much sought after. A comparable company is Herc Holdings (HRI) but it seems to be a recent spin-off from the more well known Hertz Global Holdings. In 2016 (two years ago) Herc Rentals became independent. Although comparable in terms of business area their history and track record is not the same. It will be good to keep track and perhaps compare these two companies at a later time. For now HRI has a Beta of 2.12 (almost identical to URI) and a PE Ratio of 5.59 (lower than URI) which makes HRI also a very good “value” stock. It seems both these stocks can perform well. The advantage of URI is it already has a high presence and vast network established, the brand is easily identifiable and it’s history is longer than 20 years while Herc is barely beginning.
Summary:
I believe any stock portfolio should always have something related to construction although it fluctuates with the economy. I would rank this stock as my second of the three due to its value and potential for growth. I learned that there’s a lot more to construction than just building stuff. There’s a lot of need for maintenance and equipment or tools to get the job done and this area could be more resilient to the fluctuations in the construction sector. I would like to know more about the research and development being done by United Rentals since the article indicated they’re doing interesting innovations in things that have a great impact in the environment.
Analysis: Halliburton (HAL) : Rated as Third
Halliburton is one of the world’s largest energy companies. It’s mostly focused on oil and gas and all that is related to it from research, finding, transporting and taking the product to market. It was founded in 1919. According to the company’s website, it owns hundreds of branches, brands, subsidiaries and employs about 50,000 people. Their revenue comes from operating those oil field services available more than 70 countries. Including the process of locating hydrocarbons and getting date based on geological evidences, they evaluate and construct, leads to completion.
According to the recent report by TULSA, Okla that Halliburton decided to donate $10 Million for gathering place. It is planned with in 100-acre park along the Arkansas River which will eventually put together the independent owned area for with River Parks(TULSA 3). It is a long term operation, and will improve the quality for the local area as well as the maintenance for the life of the park.
It’s interesting that they have double headquarters, one in Houston, Texas and one in Dubai. The company dates back to 1919 but incorporated in 1924. This company has had several controversies with allegations of corruption and environmental problems such as its implication in the “Deepwater Horizon explosion”.The company is still doing business and it seems to have a way to overcome these challenges.WorldOil magazine on September 24th, 2018, reported “Halliburton releases intelligent rotary steerable system”.The article was short but provides a glimpse into the company’s constant investment in research and development to improve their performance. Although the technical part is complicated what is evident is that their experience in the Middle East and around the globe provides a rich source of experience and expertise they implement when developing new technologies.
Summary: HAL is currently holding price of $40.1 for each shares. The P/E ratio of 364.55 and Beta(3y) of 1.09 , Dividend yield of 1.77. When compare to the company “XON” which is also major oil and gas corporation, (P/E ratio of 16.89 , Dividend Yield 3.88 , current market price per share of 82.93). The Beta means the volatility of a stock in the past which XOM seems a “safer” investment, the PE Ratio denotes the expected growth or overpricing of a stock. As the XON has 0.81(3y) ratio that I would purchase HAL which has more stable beta ratio for those 3 years analysis. Therefore, I would recommend to purchase HAL stock as it is steadily growing and seems stable based on the chart.