Comparing Profitability of these two stocks: Monster Beverage Corporation (MNST), Intelsat S.A. (I)

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The shares of Monster Beverage Corporation (NASDAQ:MNST) and Intelsat S.A. (NYSE:I) were among the active stocks of the last trading sessions. Monster Beverage Corporation (NASDAQ:MNST) soared to 0.53% closing at the price of $56.49 whereas the shares of Intelsat S.A. (NYSE:I) declined -1.83% with the decrease of -0.61 points closing at the price of $32.76. Monster Beverage Corporation has currently increase 0.3% in its stock over the period of 6-months while its rival Intelsat S.A. added 411.08% 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 Monster Beverage Corporation (NASDAQ:MNST) is 22.1% while the ROI of Intelsat S.A. (NYSE:I) is 7.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MNST’s EBITDA Margin is 23.14 whereas I’s is 11.13.

Both the profitability ratios suggest that Monster Beverage Corporation (NASDAQ:MNST) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Monster Beverage Corporation (NASDAQ:MNST) reported $0.49/share EPS for the previous quarter where analysts were predicting an EPS to be $0.47/share Thus beating the analyst Estimates with a Surprise Factor of 4.3 Percent. While, Intelsat S.A. (NYSE:I) reported EPS of $-0.38/share in the last quarter. The analysts projected EPS of $-0.33/share depicting a Surprise of -15.2 Percent.

Taking a look at Earnings per Share, Monster Beverage Corporation tends to be beating the analyst estimates more than Intelsat S.A.. so MNST is more profitable than I.

Technical Analysis of Monster Beverage Corporation & Intelsat S.A.

Moving average convergence divergence (MACD) shows that Monster Beverage Corporation (NASDAQ:MNST) is on a PRICE RELATIVITY trend While Intelsat S.A. (NYSE:I) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Monster Beverage Corporation was in BEARISH territory and Intelsat S.A. was in BULLISH territory.

MNST’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While I’s candle is BEARISH with MEDIUM.

EPS Growth Rate: MNST’s 17.09% versus I’s 0%

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 Monster Beverage Corporation (NASDAQ:MNST) is predicted at 17.09% while Intelsat S.A. (NYSE:I) stands at 0%. These numbers suggest that MNST 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 MNST stands at 3 while I is at 1.2 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

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 MNST and 3 for I which means MNST has Hold rating whereas I 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 MNST is $66 which is 14.41% of its current price while I has price target of 15.08 which is -117.24% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

MNST currently has price to earning P/E ratio of 34.13 whereas I has 0 while the forward P/E ratio for the prior stands at 28.5 and for the later it depicts the value of 0.

The price to Book P/B for MNST is 8.77, Price to Sale is at 8.67 and for I these ratios stand at 0 and 2.08.