The shares of UBS AG (NYSE:UBS) and Teradyne, Inc. (NYSE:TER) were among the active stocks of the last trading sessions. UBS AG (NYSE:UBS) declined to -1.32% closing at the price of $14.92 whereas the shares of Teradyne, Inc. (NYSE:TER) declined -1.2% with the decrease of -0.42 points closing at the price of $34.52. UBS AG has currently decrease -14.45% in its stock over the period of 6-months while its rival Teradyne, Inc. subtracted -20.53% 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 UBS AG (NYSE:UBS) is 1.6% while the ROI of Teradyne, Inc. (NYSE:TER) is 19.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UBS’s EBITDA Margin is NOT AVAILABLE whereas TER’s is 10.19.
Both the profitability ratios suggest a mixed sentiment for UBS AG (NYSE:UBS) and Teradyne, Inc. (NYSE:TER).
EPS & Surprise Factor
UBS AG (NYSE:UBS) reported $0.37/share EPS for the previous quarter where analysts were predicting an EPS to be $0.37/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Teradyne, Inc. (NYSE:TER) reported EPS of $0.59/share in the last quarter. The analysts projected EPS of $0.49/share depicting a Surprise of 20.4 Percent.
Taking a look at Earnings per Share, Teradyne, Inc. tends to be beating the analyst estimates more than UBS AG. so TER is more profitable than UBS.
Technical Analysis of UBS AG & Teradyne, Inc.
Moving average convergence divergence (MACD) shows that UBS AG (NYSE:UBS) is on a PRICE RELATIVITY trend While Teradyne, Inc. (NYSE:TER) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the UBS AG was in BEARISH territory and Teradyne, Inc. was in BEARISH territory.
UBS’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While TER’s candle is BULLISH with HIGH.
EPS Growth Rate: UBS’s 8.65% versus TER’s 13.88%
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 UBS AG (NYSE:UBS) is predicted at 8.65% while Teradyne, Inc. (NYSE:TER) stands at 13.88%. These numbers suggest that TER 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 UBS stands at 0 while TER is at 4.2 whereas the debt ratio of the prior is 2.94 while the debt ratio of the later is 0.21.
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 1 for UBS and 2.2 for TER which means UBS has Strong Buy rating whereas TER 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 UBS is $22.35 which is 33.24% of its current price while TER has price target of 44.61 which is 22.62% 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.
UBS currently has price to earning P/E ratio of 13.27 whereas TER has 18.47 while the forward P/E ratio for the prior stands at 9.51 and for the later it depicts the value of 13.21.
The price to Book P/B for UBS is 1.09, Price to Sale is at 3.83 and for TER these ratios stand at 3.79 and 3.31.