Performance Comparison of Xerox Corporation (XRX) and NXP Semiconductors N.V. (NXPI)

0

The shares of Xerox Corporation (NYSE:XRX) and NXP Semiconductors N.V. (NASDAQ:NXPI) were among the active stocks of the last trading sessions. Xerox Corporation (NYSE:XRX) soared to 1.37% closing at the price of $26.56 whereas the shares of NXP Semiconductors N.V. (NASDAQ:NXPI) declined -1.27% with the decrease of -1.06 points closing at the price of $82.15. Xerox Corporation has currently decrease -6.21% in its stock over the period of 6-months while its rival NXP Semiconductors N.V. subtracted -29.55% 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 Xerox Corporation (NYSE:XRX) is 5.7% while the ROI of NXP Semiconductors N.V. (NASDAQ:NXPI) is 9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, XRX’s EBITDA Margin is 7.96 whereas NXPI’s is 8.39.

Both the profitability ratios suggest that NXP Semiconductors N.V. (NASDAQ:NXPI) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Xerox Corporation (NYSE:XRX) reported $0.8/share EPS for the previous quarter where analysts were predicting an EPS to be $0.83/share Thus lagging the analyst Estimates with a Surprise Factor of -3.6 Percent. While, NXP Semiconductors N.V. (NASDAQ:NXPI) reported EPS of $1.5/share in the last quarter. The analysts projected EPS of $1.65/share depicting a Surprise of -9.1 Percent.

Taking a look at Earnings per Share, Xerox Corporation tends to be beating the analyst estimates more than NXP Semiconductors N.V.. so XRX is more profitable than NXPI.

Technical Analysis of Xerox Corporation & NXP Semiconductors N.V.

Moving average convergence divergence (MACD) shows that Xerox Corporation (NYSE:XRX) is on a PRICE RELATIVITY trend While NXP Semiconductors N.V. (NASDAQ:NXPI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Xerox Corporation was in BEARISH territory and NXP Semiconductors N.V. was in BEARISH territory.

XRX’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While NXPI’s candle is BEARISH with LOW.

EPS Growth Rate: XRX’s 2% versus NXPI’s 15.22%

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 Xerox Corporation (NYSE:XRX) is predicted at 2% while NXP Semiconductors N.V. (NASDAQ:NXPI) stands at 15.22%. These numbers suggest that NXPI 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 XRX stands at 1.8 while NXPI is at 3 whereas the debt ratio of the prior is 0.97 while the debt ratio of the later is 0.39.

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 2.8 for XRX and 2.4 for NXPI which means XRX has Hold rating whereas NXPI 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 XRX is $38.5 which is 31.01% of its current price while NXPI has price target of 107.94 which is 23.89% 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.

XRX currently has price to earning P/E ratio of 13.7 whereas NXPI has 119.23 while the forward P/E ratio for the prior stands at 7.52 and for the later it depicts the value of 9.92.

The price to Book P/B for XRX is 1.26, Price to Sale is at 0.69 and for NXPI these ratios stand at 2.06 and 3.01.