The shares of Noble Energy Inc. (NYSE:NBL) and International Paper Company (NYSE:IP) were among the active stocks of the last trading sessions. Noble Energy Inc. (NYSE:NBL) soared to 0.92% closing at the price of $31.69 whereas the shares of International Paper Company (NYSE:IP) soared 0% with the increase of 0 points closing at the price of $48.78. Noble Energy Inc. has currently increase 6.63% in its stock over the period of 6-months while its rival International Paper Company subtracted -6.17% 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 Noble Energy Inc. (NYSE:NBL) is -8.5% while the ROI of International Paper Company (NYSE:IP) is 7.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NBL’s EBITDA Margin is 9.33 whereas IP’s is 8.61.
Both the profitability ratios suggest a mixed sentiment for Noble Energy Inc. (NYSE:NBL) and International Paper Company (NYSE:IP).
EPS & Surprise Factor
Noble Energy Inc. (NYSE:NBL) reported $0.17/share EPS for the previous quarter where analysts were predicting an EPS to be $0.22/share Thus lagging the analyst Estimates with a Surprise Factor of -22.7 Percent. While, International Paper Company (NYSE:IP) reported EPS of $1.19/share in the last quarter. The analysts projected EPS of $1.09/share depicting a Surprise of 9.2 Percent.
Taking a look at Earnings per Share, International Paper Company tends to be beating the analyst estimates more than Noble Energy Inc.. so IP is more profitable than NBL.
Technical Analysis of Noble Energy Inc. & International Paper Company
Moving average convergence divergence (MACD) shows that Noble Energy Inc. (NYSE:NBL) is on a PRICE RELATIVITY trend While International Paper Company (NYSE:IP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Noble Energy Inc. was in BULLISH territory and International Paper Company was in BEARISH territory.
NBL’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While IP’s candle is BULLISH with HIGH.
EPS Growth Rate: NBL’s 65.15% versus IP’s 14.99%
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 Noble Energy Inc. (NYSE:NBL) is predicted at 65.15% while International Paper Company (NYSE:IP) stands at 14.99%. These numbers suggest that NBL 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 NBL stands at 0.8 while IP is at 1.6 whereas the debt ratio of the prior is 0.64 while the debt ratio of the later is 1.68.
The values of the both ratios suggest that IP 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 NBL and 2.1 for IP which means NBL has Hold rating whereas IP 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 NBL is $42.54 which is 25.51% of its current price while IP has price target of 63.69 which is 23.41% 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.
NBL currently has price to earning P/E ratio of 198.06 whereas IP has 14.57 while the forward P/E ratio for the prior stands at 24.49 and for the later it depicts the value of 8.67.
The price to Book P/B for NBL is 1.5, Price to Sale is at 3.24 and for IP these ratios stand at 2.95 and 0.88.