The shares of Dollar Tree, Inc. (NASDAQ:DLTR) and Hilton Worldwide Holdings Inc. (NYSE:HLT) were among the active stocks of the last trading sessions. Dollar Tree, Inc. (NASDAQ:DLTR) declined to -0.58% closing at the price of $80.64 whereas the shares of Hilton Worldwide Holdings Inc. (NYSE:HLT) declined -1.37% with the decrease of -1.03 points closing at the price of $74.38. Dollar Tree, Inc. has currently decrease -18.33% in its stock over the period of 6-months while its rival Hilton Worldwide Holdings Inc. subtracted -2.32% 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 Dollar Tree, Inc. (NASDAQ:DLTR) is 11.2% while the ROI of Hilton Worldwide Holdings Inc. (NYSE:HLT) is 11.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DLTR’s EBITDA Margin is 9.31 whereas HLT’s is 17.7.
Both the profitability ratios suggest that Hilton Worldwide Holdings Inc. (NYSE:HLT) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Dollar Tree, Inc. (NASDAQ:DLTR) reported $1.15/share EPS for the previous quarter where analysts were predicting an EPS to be $1.16/share Thus lagging the analyst Estimates with a Surprise Factor of -0.9 Percent. While, Hilton Worldwide Holdings Inc. (NYSE:HLT) reported EPS of $0.7/share in the last quarter. The analysts projected EPS of $0.7/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, Hilton Worldwide Holdings Inc. tends to be beating the analyst estimates more than Dollar Tree, Inc.. so HLT is more profitable than DLTR.
Technical Analysis of Dollar Tree, Inc. & Hilton Worldwide Holdings Inc.
Moving average convergence divergence (MACD) shows that Dollar Tree, Inc. (NASDAQ:DLTR) is on a PRICE RELATIVITY trend While Hilton Worldwide Holdings Inc. (NYSE:HLT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Dollar Tree, Inc. was in BEARISH territory and Hilton Worldwide Holdings Inc. was in BEARISH territory.
DLTR’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While HLT’s candle is BEARISH with HIGH.
EPS Growth Rate: DLTR’s 11.8% versus HLT’s 13.73%
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 Dollar Tree, Inc. (NASDAQ:DLTR) is predicted at 11.8% while Hilton Worldwide Holdings Inc. (NYSE:HLT) stands at 13.73%. These numbers suggest that HLT 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 DLTR stands at 2.2 while HLT is at 0.8 whereas the debt ratio of the prior is 0.67 while the debt ratio of the later is 13.65.
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 2.3 for DLTR and 2 for HLT which means DLTR has Hold rating whereas HLT 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 DLTR is $96.5 which is 16.44% of its current price while HLT has price target of 92.81 which is 19.86% 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.
DLTR currently has price to earning P/E ratio of 16.67 whereas HLT has 32.17 while the forward P/E ratio for the prior stands at 13.24 and for the later it depicts the value of 23.16.
The price to Book P/B for DLTR is 2.51, Price to Sale is at 0.85 and for HLT these ratios stand at 40.42 and 2.5.