The shares of CVS Health Corporation (NYSE:CVS) and Xilinx, Inc. (NASDAQ:XLNX) were among the active stocks of the last trading sessions. CVS Health Corporation (NYSE:CVS) declined to -0.91% closing at the price of $78.67 whereas the shares of Xilinx, Inc. (NASDAQ:XLNX) declined -5.28% with the decrease of -4.34 points closing at the price of $77.9. CVS Health Corporation has currently increase 24.26% in its stock over the period of 6-months while its rival Xilinx, Inc. added 16.74% 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 CVS Health Corporation (NYSE:CVS) is 9.9% while the ROI of Xilinx, Inc. (NASDAQ:XLNX) is 18.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CVS’s EBITDA Margin is 7.94 whereas XLNX’s is 19.57.
Both the profitability ratios suggest that Xilinx, Inc. (NASDAQ:XLNX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
CVS Health Corporation (NYSE:CVS) reported $1.69/share EPS for the previous quarter where analysts were predicting an EPS to be $1.61/share Thus beating the analyst Estimates with a Surprise Factor of 5 Percent. While, Xilinx, Inc. (NASDAQ:XLNX) reported EPS of $0.74/share in the last quarter. The analysts projected EPS of $0.73/share depicting a Surprise of 1.4 Percent.
Taking a look at Earnings per Share, CVS Health Corporation tends to be beating the analyst estimates more than Xilinx, Inc.. so CVS is more profitable than XLNX.
Technical Analysis of CVS Health Corporation & Xilinx, Inc.
Moving average convergence divergence (MACD) shows that CVS Health Corporation (NYSE:CVS) is on a PRICE RELATIVITY trend While Xilinx, Inc. (NASDAQ:XLNX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the CVS Health Corporation was in BULLISH territory and Xilinx, Inc. was in BULLISH territory.
CVS’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While XLNX’s candle is BEARISH with HIGH.
EPS Growth Rate: CVS’s 10.79% versus XLNX’s 15.85%
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 CVS Health Corporation (NYSE:CVS) is predicted at 10.79% while Xilinx, Inc. (NASDAQ:XLNX) stands at 15.85%. These numbers suggest that XLNX 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 CVS stands at 2.3 while XLNX is at 4.4 whereas the debt ratio of the prior is 1.83 while the debt ratio of the later is 0.74.
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 1.9 for CVS and 2.4 for XLNX which means CVS has Buy rating whereas XLNX 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 CVS is $88.35 which is 10.96% of its current price while XLNX has price target of 82.29 which is 5.33% 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.
CVS currently has price to earning P/E ratio of 53.85 whereas XLNX has 26.01 while the forward P/E ratio for the prior stands at 10.74 and for the later it depicts the value of 23.69.
The price to Book P/B for CVS is 2.25, Price to Sale is at 0.43 and for XLNX these ratios stand at 8.49 and 7.98.