The shares of J.C. Penney Company, Inc. Holding Company (NYSE:JCP) and Coca-Cola Company (The) (NYSE:KO) were among the active stocks of the last trading sessions. J.C. Penney Company, Inc. Holding Company (NYSE:JCP) soared to 2.47% closing at the price of $1.66 whereas the shares of Coca-Cola Company (The) (NYSE:KO) soared 1.31% with the increase of 0.6 points closing at the price of $46.48. J.C. Penney Company, Inc. Holding Company has currently decrease -51.18% in its stock over the period of 6-months while its rival Coca-Cola Company (The) added 5.66% 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 J.C. Penney Company, Inc. Holding Company (NYSE:JCP) is 2.4% while the ROI of Coca-Cola Company (The) (NYSE:KO) is 12.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, JCP’s EBITDA Margin is 5.74 whereas KO’s is 20.43.
Both the profitability ratios suggest that Coca-Cola Company (The) (NYSE:KO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
J.C. Penney Company, Inc. Holding Company (NYSE:JCP) reported $-0.38/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.06/share Thus lagging the analyst Estimates with a Surprise Factor of -533.3 Percent. While, Coca-Cola Company (The) (NYSE:KO) reported EPS of $0.61/share in the last quarter. The analysts projected EPS of $0.6/share depicting a Surprise of 1.7 Percent.
Taking a look at Earnings per Share, Coca-Cola Company (The) tends to be beating the analyst estimates more than J.C. Penney Company, Inc. Holding Company. so KO is more profitable than JCP.
Technical Analysis of J.C. Penney Company, Inc. Holding Company & Coca-Cola Company (The)
Moving average convergence divergence (MACD) shows that J.C. Penney Company, Inc. Holding Company (NYSE:JCP) is on a PRICE RELATIVITY trend While Coca-Cola Company (The) (NYSE:KO) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the J.C. Penney Company, Inc. Holding Company was in BEARISH territory and Coca-Cola Company (The) was in BULLISH territory.
JCP’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While KO’s candle is BULLISH with MEDIUM.
EPS Growth Rate: JCP’s 0% versus KO’s 7.16%
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 J.C. Penney Company, Inc. Holding Company (NYSE:JCP) is predicted at 0% while Coca-Cola Company (The) (NYSE:KO) stands at 7.16%. These numbers suggest that KO 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 JCP stands at 1.6 while KO is at 1.1 whereas the debt ratio of the prior is 3.47 while the debt ratio of the later is 2.55.
The values of the both ratios suggest that JCP 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 3.3 for JCP and 2.3 for KO which means JCP has Sell rating whereas KO 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 JCP is $1.58 which is -5.06% of its current price while KO has price target of 50.98 which is 8.83% 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.
JCP currently has price to earning P/E ratio of 0 whereas KO has 33.83 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 20.81.
The price to Book P/B for JCP is 0.43, Price to Sale is at 0.04 and for KO these ratios stand at 10.78 and 5.96.