The shares of Weatherford International plc (NYSE:WFT) and CenturyLink, Inc. (NYSE:CTL) were among the active stocks of the last trading sessions. Weatherford International plc (NYSE:WFT) soared to 0.72% closing at the price of $2.8 whereas the shares of CenturyLink, Inc. (NYSE:CTL) declined -0.05% with the decrease of -0.01 points closing at the price of $21.86. Weatherford International plc has currently increase 19.15% in its stock over the period of 6-months while its rival CenturyLink, Inc. added 26.29% 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 Weatherford International plc (NYSE:WFT) is -32.8% while the ROI of CenturyLink, Inc. (NYSE:CTL) is 2.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WFT’s EBITDA Margin is -58.1 whereas CTL’s is 7.84.
Both the profitability ratios suggest that CenturyLink, Inc. (NYSE:CTL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Weatherford International plc (NYSE:WFT) reported $-0.16/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.18/share Thus beating the analyst Estimates with a Surprise Factor of 11.1 Percent. While, CenturyLink, Inc. (NYSE:CTL) reported EPS of $0.26/share in the last quarter. The analysts projected EPS of $0.25/share depicting a Surprise of 4 Percent.
Taking a look at Earnings per Share, Weatherford International plc tends to be beating the analyst estimates more than CenturyLink, Inc.. so WFT is more profitable than CTL.
Technical Analysis of Weatherford International plc & CenturyLink, Inc.
Moving average convergence divergence (MACD) shows that Weatherford International plc (NYSE:WFT) is on a PRICE RELATIVITY trend While CenturyLink, Inc. (NYSE:CTL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Weatherford International plc was in BULLISH territory and CenturyLink, Inc. was in BULLISH territory.
WFT’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While CTL’s candle is BEARISH with MEDIUM.
EPS Growth Rate: WFT’s 0% versus CTL’s 0%
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 Weatherford International plc (NYSE:WFT) is predicted at 0% while CenturyLink, Inc. (NYSE:CTL) stands at 0%. These numbers suggest that CTL 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 WFT stands at 1.7 while CTL is at 1 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.62.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
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 WFT and 2.6 for CTL which means WFT has Buy rating whereas CTL 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 WFT is $4.49 which is 37.64% of its current price while CTL has price target of 21.44 which is -1.96% 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.
WFT currently has price to earning P/E ratio of 0 whereas CTL has 38.35 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 17.8.
The price to Book P/B for WFT is 0, Price to Sale is at 0.48 and for CTL these ratios stand at 1.01 and 1.11.