Reviewing HC2 (HCHC) and General Electric (GE)

HC2 (NYSE: HCHC) and General Electric (NYSE:GE) are both multi-sector conglomerates companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for HC2 and General Electric, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HC2 0 0 1 0 3.00
General Electric 4 8 8 0 2.20

HC2 presently has a consensus target price of $11.50, indicating a potential upside of 78.29%. General Electric has a consensus target price of $23.71, indicating a potential upside of 26.41%. Given HC2’s stronger consensus rating and higher probable upside, equities analysts plainly believe HC2 is more favorable than General Electric.

Institutional and Insider Ownership

59.9% of HC2 shares are held by institutional investors. Comparatively, 55.6% of General Electric shares are held by institutional investors. 16.0% of HC2 shares are held by company insiders. Comparatively, 0.4% of General Electric shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares HC2 and General Electric’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HC2 $1.56 billion 0.18 -$94.54 million ($2.58) -2.50
General Electric $123.69 billion 1.32 $8.83 billion $0.86 21.81

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

Profitability

This table compares HC2 and General Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HC2 -6.13% -67.69% -1.67%
General Electric 6.08% 13.72% 3.06%

Dividends

General Electric pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. HC2 does not pay a dividend. General Electric pays out 55.8% of its earnings in the form of a dividend.

Volatility and Risk

HC2 has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, General Electric has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Summary

General Electric beats HC2 on 10 of the 15 factors compared between the two stocks.

HC2 Company Profile

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.

General Electric Company Profile

General Electric Company is a global digital industrial company. The Company’s products and services range from aircraft engines, power generation, and oil and gas production equipment to medical imaging, financing and industrial products. Its segments include Power, which includes products and services related to energy production; Renewable Energy, which offers renewable power sources; Oil & Gas, including liquefied natural gas and pipelines; Aviation, which includes commercial and military aircraft engines, and integrated digital components, among others; Healthcare, which provides healthcare technologies in medical imaging, digital solutions, patient monitoring and diagnostics, and drug discovery, among others; Transportation, which is a supplier to the railroad, mining, marine, stationary power and drilling industries; Energy Connections & Lighting, which includes Energy Connections and Lighting businesses, and Capital, which is a financial services division.

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