The shares of Restaurant Brands International Inc. (NYSE:QSR) and Cadence Design Systems, Inc. (NASDAQ:CDNS) were among the active stocks of the last trading sessions. Restaurant Brands International Inc. (NYSE:QSR) soared to 1.28% closing at the price of $61.83 whereas the shares of Cadence Design Systems, Inc. (NASDAQ:CDNS) declined -0.2% with the decrease of -0.0899999999999963 points closing at the price of $44.78. Restaurant Brands International Inc. has currently decrease -1.98% in its stock over the period of 6-months while its rival Cadence Design Systems, Inc. subtracted -0.31% 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 Restaurant Brands International Inc. (NYSE:QSR) is 0% while the ROI of Cadence Design Systems, Inc. (NASDAQ:CDNS) is 6.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, QSR’s EBITDA Margin is 12.51 whereas CDNS’s is 27.64.
Both the profitability ratios suggest that Cadence Design Systems, Inc. (NASDAQ:CDNS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Restaurant Brands International Inc. (NYSE:QSR) reported $0.66/share EPS for the previous quarter where analysts were predicting an EPS to be $0.57/share Thus beating the analyst Estimates with a Surprise Factor of 15.8 Percent. While, Cadence Design Systems, Inc. (NASDAQ:CDNS) reported EPS of $0.4/share in the last quarter. The analysts projected EPS of $0.37/share depicting a Surprise of 8.1 Percent.
Taking a look at Earnings per Share, Restaurant Brands International Inc. tends to be beating the analyst estimates more than Cadence Design Systems, Inc.. so QSR is more profitable than CDNS.
Technical Analysis of Restaurant Brands International Inc. & Cadence Design Systems, Inc.
Moving average convergence divergence (MACD) shows that Restaurant Brands International Inc. (NYSE:QSR) is on a PRICE RELATIVITY trend While Cadence Design Systems, Inc. (NASDAQ:CDNS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Restaurant Brands International Inc. was in BULLISH territory and Cadence Design Systems, Inc. was in BULLISH territory.
QSR’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CDNS’s candle is BEARISH with MEDIUM.
EPS Growth Rate: QSR’s 19.13% versus CDNS’s 12%
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 Restaurant Brands International Inc. (NYSE:QSR) is predicted at 19.13% while Cadence Design Systems, Inc. (NASDAQ:CDNS) stands at 12%. These numbers suggest that QSR 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 QSR stands at 0 while CDNS is at 1.2 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.6.
The values of the both ratios suggest that CDNS is more suitable investment when the liquidity and risk is the main concern.
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 2.3 for QSR and 2.4 for CDNS which means QSR has Hold rating whereas CDNS has Hold 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 QSR is $70.5 which is 12.3% of its current price while CDNS has price target of 46.16 which is 2.99% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
QSR currently has price to earning P/E ratio of 21.19 whereas CDNS has 112.8 while the forward P/E ratio for the prior stands at 20.75 and for the later it depicts the value of 25.29.
The price to Book P/B for QSR is 7.41, Price to Sale is at 3.19 and for CDNS these ratios stand at 10.74 and 6.21.