The shares of Constellation Brands Inc (NYSE:STZ) and Realty Income Corporation (NYSE:O) were among the active stocks of the last trading sessions. Constellation Brands Inc (NYSE:STZ) soared to 0.49% closing at the price of $223.18 whereas the shares of Realty Income Corporation (NYSE:O) soared 0.92% with the increase of 0.52 points closing at the price of $57.06. Constellation Brands Inc has currently decrease -1.34% in its stock over the period of 6-months while its rival Realty Income Corporation added 9.96% 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 Constellation Brands Inc (NYSE:STZ) is 10% while the ROI of Realty Income Corporation (NYSE:O) is 2.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, STZ’s EBITDA Margin is 18.21 whereas O’s is 20.06.
Both the profitability ratios suggest a mixed sentiment for Constellation Brands Inc (NYSE:STZ) and Realty Income Corporation (NYSE:O).
EPS & Surprise Factor
Constellation Brands Inc (NYSE:STZ) reported $2.87/share EPS for the previous quarter where analysts were predicting an EPS to be $2.6/share Thus beating the analyst Estimates with a Surprise Factor of 10.4 Percent. While, Realty Income Corporation (NYSE:O) reported EPS of $0.34/share in the last quarter. The analysts projected EPS of $0.32/share depicting a Surprise of 6.3 Percent.
Taking a look at Earnings per Share, Constellation Brands Inc tends to be beating the analyst estimates more than Realty Income Corporation. so STZ is more profitable than O.
Technical Analysis of Constellation Brands Inc & Realty Income Corporation
Moving average convergence divergence (MACD) shows that Constellation Brands Inc (NYSE:STZ) is on a PRICE RELATIVITY trend While Realty Income Corporation (NYSE:O) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Constellation Brands Inc was in BULLISH territory and Realty Income Corporation was in BULLISH territory.
STZ’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While O’s candle is BULLISH with LOW.
EPS Growth Rate: STZ’s 12% versus O’s 7.8%
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 Constellation Brands Inc (NYSE:STZ) is predicted at 12% while Realty Income Corporation (NYSE:O) stands at 7.8%. These numbers suggest that STZ 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 STZ stands at 1.7 while O is at 0 whereas the debt ratio of the prior is 0.88 while the debt ratio of the later is 0.88.
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 2.2 for STZ and 2.8 for O which means STZ has Hold rating whereas O 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 STZ is $244.5 which is 8.72% of its current price while O has price target of 58.71 which is 2.81% 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.
STZ currently has price to earning P/E ratio of 21.64 whereas O has 49.02 while the forward P/E ratio for the prior stands at 21.74 and for the later it depicts the value of 42.77.
The price to Book P/B for STZ is 3.77, Price to Sale is at 5.53 and for O these ratios stand at 2.17 and 12.97.