The shares of ENSCO plc (NYSE:ESV) and AT&T Inc. (NYSE:T) were among the active stocks of the last trading sessions. ENSCO plc (NYSE:ESV) soared to 3.66% closing at the price of $8.79 whereas the shares of AT&T Inc. (NYSE:T) soared 0.35% with the increase of 0.12 points closing at the price of $34.11. ENSCO plc has currently increase 79.39% in its stock over the period of 6-months while its rival AT&T Inc. subtracted -4.75% 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 ENSCO plc (NYSE:ESV) is -1.7% while the ROI of AT&T Inc. (NYSE:T) is 5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ESV’s EBITDA Margin is 22.9 whereas T’s is 9.38.
Both the profitability ratios suggest a mixed sentiment for ENSCO plc (NYSE:ESV) and AT&T Inc. (NYSE:T).
EPS & Surprise Factor
ENSCO plc (NYSE:ESV) reported $-0.3/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.31/share Thus beating the analyst Estimates with a Surprise Factor of 3.2 Percent. While, AT&T Inc. (NYSE:T) reported EPS of $0.91/share in the last quarter. The analysts projected EPS of $0.85/share depicting a Surprise of 7.1 Percent.
Taking a look at Earnings per Share, AT&T Inc. tends to be beating the analyst estimates more than ENSCO plc. so T is more profitable than ESV.
Technical Analysis of ENSCO plc & AT&T Inc.
Moving average convergence divergence (MACD) shows that ENSCO plc (NYSE:ESV) is on a PRICE RELATIVITY trend While AT&T Inc. (NYSE:T) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ENSCO plc was in BULLISH territory and AT&T Inc. was in BULLISH territory.
ESV’s current statistics gauge that the stock candle is BULLISH with LOW volatility. While T’s candle is BULLISH with LOW.
EPS Growth Rate: ESV’s 0% versus T’s 6.25%
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 ENSCO plc (NYSE:ESV) is predicted at 0% while AT&T Inc. (NYSE:T) stands at 6.25%. These numbers suggest that T 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 ESV stands at 2.7 while T is at 0.8 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.04.
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 2.6 for ESV and 2.6 for T which means ESV has Hold rating whereas T 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 ESV is $7.58 which is -15.96% of its current price while T has price target of 35.36 which is 3.54% 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.
ESV currently has price to earning P/E ratio of 0 whereas T has 18.42 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 9.43.
The price to Book P/B for ESV is 0.45, Price to Sale is at 2.13 and for T these ratios stand at 1.18 and 1.57.