The shares of Alamos Gold Inc. (NYSE:AGI) and 3M Company (NYSE:MMM) were among the active stocks of the last trading sessions. Alamos Gold Inc. (NYSE:AGI) soared to 2.16% closing at the price of $4.72 whereas the shares of 3M Company (NYSE:MMM) soared 0.55% with the increase of 1.18 points closing at the price of $214.37. Alamos Gold Inc. has currently decrease -13.87% in its stock over the period of 6-months while its rival 3M Company subtracted -1.2% 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 Alamos Gold Inc. (NYSE:AGI) is 0% while the ROI of 3M Company (NYSE:MMM) is 23.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AGI’s EBITDA Margin is 7.11 whereas MMM’s is 16.
Both the profitability ratios suggest that 3M Company (NYSE:MMM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Alamos Gold Inc. (NYSE:AGI) reported $0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $0.03/share Thus beating the analyst Estimates with a Surprise Factor of 100 Percent. While, 3M Company (NYSE:MMM) reported EPS of $2.59/share in the last quarter. The analysts projected EPS of $2.58/share depicting a Surprise of 0.4 Percent.
Taking a look at Earnings per Share, Alamos Gold Inc. tends to be beating the analyst estimates more than 3M Company. so AGI is more profitable than MMM.
Technical Analysis of Alamos Gold Inc. & 3M Company
Moving average convergence divergence (MACD) shows that Alamos Gold Inc. (NYSE:AGI) is on a PRICE RELATIVITY trend While 3M Company (NYSE:MMM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Alamos Gold Inc. was in BULLISH territory and 3M Company was in BULLISH territory.
AGI’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While MMM’s candle is BULLISH with MEDIUM.
EPS Growth Rate: AGI’s 0% versus MMM’s 9.44%
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 Alamos Gold Inc. (NYSE:AGI) is predicted at 0% while 3M Company (NYSE:MMM) stands at 9.44%. These numbers suggest that MMM 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 AGI stands at 0 while MMM is at 1.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.4.
The values of the both ratios suggest that MMM 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 2.2 for AGI and 2.9 for MMM which means AGI has Hold rating whereas MMM 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 AGI is $8.82 which is 46.49% of its current price while MMM has price target of 211.5 which is -1.36% 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.
AGI currently has price to earning P/E ratio of 104.89 whereas MMM has 24.26 while the forward P/E ratio for the prior stands at 15.23 and for the later it depicts the value of 19.15.
The price to Book P/B for AGI is 0.69, Price to Sale is at 2.91 and for MMM these ratios stand at 12.23 and 3.84.