The shares of NVIDIA Corporation (NASDAQ:NVDA) and Goldcorp Inc. (NYSE:GG) were among the active stocks of the last trading sessions. NVIDIA Corporation (NASDAQ:NVDA) declined to -3.38% closing at the price of $269.86 whereas the shares of Goldcorp Inc. (NYSE:GG) declined -2.15% with the decrease of -0.22 points closing at the price of $9.99. NVIDIA Corporation has currently increase 25.28% in its stock over the period of 6-months while its rival Goldcorp Inc. subtracted -28.28% 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 NVIDIA Corporation (NASDAQ:NVDA) is 30.9% while the ROI of Goldcorp Inc. (NYSE:GG) is 5.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NVDA’s EBITDA Margin is 34.09 whereas GG’s is 9.07.
Both the profitability ratios suggest that NVIDIA Corporation (NASDAQ:NVDA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
NVIDIA Corporation (NASDAQ:NVDA) reported $1.76/share EPS for the previous quarter where analysts were predicting an EPS to be $1.66/share Thus beating the analyst Estimates with a Surprise Factor of 6 Percent. While, Goldcorp Inc. (NYSE:GG) reported EPS of $0.05/share in the last quarter. The analysts projected EPS of $0.07/share depicting a Surprise of -28.6 Percent.
Taking a look at Earnings per Share, NVIDIA Corporation tends to be beating the analyst estimates more than Goldcorp Inc.. so NVDA is more profitable than GG.
Technical Analysis of NVIDIA Corporation & Goldcorp Inc.
Moving average convergence divergence (MACD) shows that NVIDIA Corporation (NASDAQ:NVDA) is on a PRICE RELATIVITY trend While Goldcorp Inc. (NYSE:GG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the NVIDIA Corporation was in BULLISH territory and Goldcorp Inc. was in BEARISH territory.
NVDA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GG’s candle is BEARISH with LOW.
EPS Growth Rate: NVDA’s 17.16% versus GG’s 17.35%
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 NVIDIA Corporation (NASDAQ:NVDA) is predicted at 17.16% while Goldcorp Inc. (NYSE:GG) stands at 17.35%. These numbers suggest that GG 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 NVDA stands at 7.4 while GG is at 1 whereas the debt ratio of the prior is 0.23 while the debt ratio of the later is 0.21.
The values of the both ratios suggest that NVDA 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 2.1 for NVDA and 2.2 for GG which means NVDA has Hold rating whereas GG 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 NVDA is $297.21 which is 9.2% of its current price while GG has price target of 16.58 which is 39.75% 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.
NVDA currently has price to earning P/E ratio of 40.61 whereas GG has 30.18 while the forward P/E ratio for the prior stands at 33.6 and for the later it depicts the value of 17.16.
The price to Book P/B for NVDA is 18.62, Price to Sale is at 14.3 and for GG these ratios stand at 0.62 and 2.64.