The shares of ON Semiconductor Corporation (NASDAQ:ON) and Annaly Capital Management Inc (NYSE:NLY) were among the active stocks of the last trading sessions. ON Semiconductor Corporation (NASDAQ:ON) declined to -2.57% closing at the price of $17.09 whereas the shares of Annaly Capital Management Inc (NYSE:NLY) soared 0.69% with the increase of 0.07 points closing at the price of $10.18. ON Semiconductor Corporation has currently decrease -30.36% in its stock over the period of 6-months while its rival Annaly Capital Management Inc subtracted -2.3% 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 ON Semiconductor Corporation (NASDAQ:ON) is 8.1% while the ROI of Annaly Capital Management Inc (NYSE:NLY) is 1.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ON’s EBITDA Margin is 7.51 whereas NLY’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for ON Semiconductor Corporation (NASDAQ:ON) and Annaly Capital Management Inc (NYSE:NLY).
EPS & Surprise Factor
ON Semiconductor Corporation (NASDAQ:ON) reported $0.46/share EPS for the previous quarter where analysts were predicting an EPS to be $0.45/share Thus beating the analyst Estimates with a Surprise Factor of 2.2 Percent. While, Annaly Capital Management Inc (NYSE:NLY) reported EPS of $0.3/share in the last quarter. The analysts projected EPS of $0.29/share depicting a Surprise of 3.4 Percent.
Taking a look at Earnings per Share, Annaly Capital Management Inc tends to be beating the analyst estimates more than ON Semiconductor Corporation. so NLY is more profitable than ON.
Technical Analysis of ON Semiconductor Corporation & Annaly Capital Management Inc
Moving average convergence divergence (MACD) shows that ON Semiconductor Corporation (NASDAQ:ON) is on a PRICE RELATIVITY trend While Annaly Capital Management Inc (NYSE:NLY) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ON Semiconductor Corporation was in BEARISH territory and Annaly Capital Management Inc was in BEARISH territory.
ON’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While NLY’s candle is BULLISH with LOW.
EPS Growth Rate: ON’s 14.78% versus NLY’s -1.93%
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 ON Semiconductor Corporation (NASDAQ:ON) is predicted at 14.78% while Annaly Capital Management Inc (NYSE:NLY) stands at -1.93%. These numbers suggest that ON 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 ON stands at 1.5 while NLY is at 0 whereas the debt ratio of the prior is 0.9 while the debt ratio of the later is 6.85.
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 2.3 for ON and 3 for NLY which means ON has Hold rating whereas NLY 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 ON is $26.36 which is 35.17% of its current price while NLY has price target of 10.5 which is 3.05% 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.
ON currently has price to earning P/E ratio of 15.49 whereas NLY has 4.01 while the forward P/E ratio for the prior stands at 8.55 and for the later it depicts the value of 8.77.
The price to Book P/B for ON is 2.37, Price to Sale is at 1.32 and for NLY these ratios stand at 0.98 and 2.82.