United Continental Holdings (NYSE: UAL) is a $22 billion company today. Investors that bought shares one year ago are sitting on a 21.76% total return. That’s above the S&P 500’s return of 14.21%.[ad#Google Adsense 336×280-IA]United Continental Holdings stock is beating the market, but does that make it a good buy today?
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…
Earnings-per-Share (EPS) Growth: United Continental Holdings reported a recent EPS growth rate of -43.75%. That’s below the industry average of 177.14%. That’s not a good sign. We like to see companies that have higher earnings growth.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the airline industry is 53.19. And United Continental Holdings’ ratio comes in at 7.92. It’s trading at a better value than many of its competitors.
Debt-to-Equity : The debt-to-equity ratio for United Continental Holdings stock is 135.18. That’s below the industry average of 175.53. The company is less leveraged.
Free Cash Flow per Share Growth : United Continental Holdings has increased its FCF per share 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.
Profit Margins : The profit margin of United Continental Holdings comes in at 4.39% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. United Continental Holdings’ profit margin is below the airline industry of 9.6%. So that’s a negative 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 United Continental Holdings is 25.68%, and that’s above its industry average ROE of 22.41%.
United Continental Holdings 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.
— Rob Otman[ad#agora]
Source: Investment U