Which is the most compelling pick right now? Mastercard Incorporated (MA) or Aptiv PLC (APTV)

The shares of Mastercard Incorporated (NYSE:MA) and Aptiv PLC (NYSE:APTV) were among the active stocks of the last trading sessions. Mastercard Incorporated (NYSE:MA) declined to -1.34% closing at the price of $213.26 whereas the shares of Aptiv PLC (NYSE:APTV) declined -4.61% with the decrease of -3.82 points closing at the price of $79.01. Mastercard Incorporated has currently increase 25.2% in its stock over the period of 6-months while its rival Aptiv PLC subtracted -5.57% 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 Mastercard Incorporated (NYSE:MA) is 44% while the ROI of Aptiv PLC (NYSE:APTV) is 16.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MA’s EBITDA Margin is 26.76 whereas APTV’s is 11.55.

Both the profitability ratios suggest that Mastercard Incorporated (NYSE:MA) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Mastercard Incorporated (NYSE:MA) reported $1.66/share EPS for the previous quarter where analysts were predicting an EPS to be $1.53/share Thus beating the analyst Estimates with a Surprise Factor of 8.5 Percent. While, Aptiv PLC (NYSE:APTV) reported EPS of $1.4/share in the last quarter. The analysts projected EPS of $1.35/share depicting a Surprise of 3.7 Percent.

Taking a look at Earnings per Share, Mastercard Incorporated tends to be beating the analyst estimates more than Aptiv PLC. so MA is more profitable than APTV.

Technical Analysis of Mastercard Incorporated & Aptiv PLC

Moving average convergence divergence (MACD) shows that Mastercard Incorporated (NYSE:MA) is on a PRICE RELATIVITY trend While Aptiv PLC (NYSE:APTV) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Mastercard Incorporated was in BEARISH territory and Aptiv PLC was in BEARISH territory.

MA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While APTV’s candle is BEARISH with HIGH.

EPS Growth Rate: MA’s 22.57% versus APTV’s 13.37%

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 Mastercard Incorporated (NYSE:MA) is predicted at 22.57% while Aptiv PLC (NYSE:APTV) stands at 13.37%. These numbers suggest that MA 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 MA stands at 1.5 while APTV is at 1.6 whereas the debt ratio of the prior is 1.11 while the debt ratio of the later is 1.16.

The values of the both ratios suggest that APTV is more suitable investment when the liquidity and risk is the main concern.

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 1.7 for MA and 1.9 for APTV which means MA has Buy rating whereas APTV 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 MA is $232.03 which is 8.09% of its current price while APTV has price target of 106.33 which is 25.69% 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.

MA currently has price to earning P/E ratio of 41.08 whereas APTV has 18.82 while the forward P/E ratio for the prior stands at 28.42 and for the later it depicts the value of 13.36.

The price to Book P/B for MA is 42.31, Price to Sale is at 16.08 and for APTV these ratios stand at 5.94 and 1.58.