Comparing Profitability of these two stocks: Simon Property Group, Inc. (SPG), TE Connectivity Ltd. (TEL)

10

The shares of Simon Property Group, Inc. (NYSE:SPG) and TE Connectivity Ltd. (NYSE:TEL) were among the active stocks of the last trading sessions. Simon Property Group, Inc. (NYSE:SPG) soared to 0.4% closing at the price of $172.83 whereas the shares of TE Connectivity Ltd. (NYSE:TEL) soared 0.83% with the increase of 0.77000000000001 points closing at the price of $93.54. Simon Property Group, Inc. has currently increase 2.12% in its stock over the period of 6-months while its rival TE Connectivity Ltd. subtracted -6.28% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money, The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Simon Property Group, Inc. (NYSE:SPG) is 9.5% while the ROI of TE Connectivity Ltd. (NYSE:TEL) is 12.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SPG’s EBITDA Margin is 18.71 whereas TEL’s is 11.99.

Both the profitability ratios suggest a mixed sentiment for Simon Property Group, Inc. (NYSE:SPG) and TE Connectivity Ltd. (NYSE:TEL).

EPS & Surprise Factor

Simon Property Group, Inc. (NYSE:SPG) reported $2/share EPS for the previous quarter where analysts were predicting an EPS to be $1.52/share Thus beating the analyst Estimates with a Surprise Factor of 31.6 Percent. While, TE Connectivity Ltd. (NYSE:TEL) reported EPS of $1.42/share in the last quarter. The analysts projected EPS of $1.36/share depicting a Surprise of 4.4 Percent.

Taking a look at Earnings per Share, Simon Property Group, Inc. tends to be beating the analyst estimates more than TE Connectivity Ltd.. so SPG is more profitable than TEL.

Technical Analysis of Simon Property Group, Inc. & TE Connectivity Ltd.

Moving average convergence divergence (MACD) shows that Simon Property Group, Inc. (NYSE:SPG) is on a PRICE RELATIVITY trend While TE Connectivity Ltd. (NYSE:TEL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Simon Property Group, Inc. was in BULLISH territory and TE Connectivity Ltd. was in BULLISH territory.

SPG’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While TEL’s candle is BULLISH with MEDIUM.

EPS Growth Rate: SPG’s 8.6% versus TEL’s 10.11%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Simon Property Group, Inc. (NYSE:SPG) is predicted at 8.6% while TE Connectivity Ltd. (NYSE:TEL) stands at 10.11%. These numbers suggest that TEL is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of SPG stands at 0 while TEL is at 1.4 whereas the debt ratio of the prior is 6.83 while the debt ratio of the later is 0.42.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2 for SPG and 1.7 for TEL which means SPG has Buy rating whereas TEL has Buy rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for SPG is $182.44 which is 5.27% of its current price while TEL has price target of 114.57 which is 18.36% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

SPG currently has price to earning P/E ratio of 26.79 whereas TEL has 17.63 while the forward P/E ratio for the prior stands at 24.03 and for the later it depicts the value of 15.45.

The price to Book P/B for SPG is 17.84, Price to Sale is at 9.47 and for TEL these ratios stand at 3.46 and 2.34.