HC2 (NYSE: HCHC) and Icahn Enterprises (NASDAQ:IEP) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Profitability

This table compares HC2 and Icahn Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HC2 -6.13% -67.69% -1.67%
Icahn Enterprises 8.98% 19.84% 5.72%

Volatility and Risk

HC2 has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Icahn Enterprises has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Earnings & Valuation

This table compares HC2 and Icahn Enterprises’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HC2 $1.56 billion 0.16 -$94.54 million ($2.58) -2.23
Icahn Enterprises $16.35 billion 0.54 -$1.13 billion $11.50 4.51

HC2 has higher earnings, but lower revenue than Icahn Enterprises. HC2 is trading at a lower price-to-earnings ratio than Icahn Enterprises, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for HC2 and Icahn Enterprises, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HC2 0 0 1 0 3.00
Icahn Enterprises 0 0 1 0 3.00

HC2 currently has a consensus target price of $11.50, suggesting a potential upside of 100.00%. Icahn Enterprises has a consensus target price of $61.00, suggesting a potential upside of 17.62%. Given HC2’s higher possible upside, analysts clearly believe HC2 is more favorable than Icahn Enterprises.

Insider & Institutional Ownership

59.9% of HC2 shares are owned by institutional investors. Comparatively, 97.5% of Icahn Enterprises shares are owned by institutional investors. 16.0% of HC2 shares are owned by company insiders. Comparatively, 90.1% of Icahn Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Icahn Enterprises pays an annual dividend of $1.50 per share and has a dividend yield of 2.9%. HC2 does not pay a dividend. Icahn Enterprises pays out 13.0% of its earnings in the form of a dividend.

Summary

Icahn Enterprises beats HC2 on 10 of the 13 factors compared between the two stocks.

About HC2

HC2 Holdings, Inc. engages in construction, marine services, insurance, telecommunications, energy, life sciences, and other businesses in the United States, the United Kingdom, and internationally. The company fabricates and erects structural steel for commercial and industrial construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, and power plants. It also fabricates trusses and girders; and fabricates and erects water pipes, water storage tanks, pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and various customized products. In addition, the company provides subsea cable installation and maintenance services for the telecommunications sector; installation, maintenance, and repair services for fiber optic communication and power infrastructure to offshore platforms; and installation services for power cables for use in offshore wind farms and in the offshore wind market. Further, it distributes natural gas motor fuels; designs, builds, owns, acquires, operates, and maintains compressed natural gas fueling stations for transportation vehicles; and offers voice communication services for national telecommunications, mobile, prepaid, and voice over Internet protocol service operators, as well as wholesale carriers and Internet service providers. Additionally, the company provides long-term care, life, and annuity insurance products to individuals. Furthermore, it focuses on developing products to treat early osteoarthritis of the knee; develops skin lightening technology; owns licenses to create and distribute NASCAR video games; and offers analytics on broadcast TV, digital, and social media online platforms. The company was formerly known as PTGi Holding Inc. and changed its name to HC2 Holdings, Inc. in April 2014. HC2 Holdings, Inc. was founded in 1994 and is headquartered in New York, New York.

About Icahn Enterprises

Icahn Enterprises L.P. (Icahn Enterprises) is a holding company. The Company’s segments include Automotive, Energy, Metals, Railcar, Gaming, Food Packaging, Mining, Real Estate and Home Fashion. The Company’s Investment segment includes various private investment funds. The Company operates its Automotive segment through its ownership in Federal-Mogul Holdings Corporation and IEH Auto Parts Holding LLC. The Company operates Energy segment through its controlling interest in CVR Energy, Inc. It operates its Metals segment through its subsidiary, PSC Metals, Inc. The Company operates its Railcar segment through its ownership interests in American Railcar Industries, Inc. Its Food Packaging segment consists of ownership in Viskase Companies, Inc. The Company’s Real Estate operations consist of rental real estate, property development and associated resorts. It also owns a limited partner interest in Icahn Enterprises Holdings L.P. (Icahn Enterprises Holdings).

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