The shares of Viacom Inc. (NASDAQ:VIAB) and Amgen Inc. (NASDAQ:AMGN) were among the active stocks of the last trading sessions. Viacom Inc. (NASDAQ:VIAB) soared to 0.43% closing at the price of $32.74 whereas the shares of Amgen Inc. (NASDAQ:AMGN) soared 0.76% with the increase of 1.55 points closing at the price of $205.57. Viacom Inc. has currently increase 5.48% in its stock over the period of 6-months while its rival Amgen Inc. added 18.74% 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 Viacom Inc. (NASDAQ:VIAB) is 14.5% while the ROI of Amgen Inc. (NASDAQ:AMGN) is 14%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VIAB’s EBITDA Margin is 7.75 whereas AMGN’s is 10.96.
Both the profitability ratios suggest a mixed sentiment for Viacom Inc. (NASDAQ:VIAB) and Amgen Inc. (NASDAQ:AMGN).
EPS & Surprise Factor
Viacom Inc. (NASDAQ:VIAB) reported $1.18/share EPS for the previous quarter where analysts were predicting an EPS to be $1.07/share Thus beating the analyst Estimates with a Surprise Factor of 10.3 Percent. While, Amgen Inc. (NASDAQ:AMGN) reported EPS of $3.83/share in the last quarter. The analysts projected EPS of $3.54/share depicting a Surprise of 8.2 Percent.
Taking a look at Earnings per Share, Viacom Inc. tends to be beating the analyst estimates more than Amgen Inc.. so VIAB is more profitable than AMGN.
Technical Analysis of Viacom Inc. & Amgen Inc.
Moving average convergence divergence (MACD) shows that Viacom Inc. (NASDAQ:VIAB) is on a PRICE RELATIVITY trend While Amgen Inc. (NASDAQ:AMGN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Viacom Inc. was in BEARISH territory and Amgen Inc. was in BEARISH territory.
VIAB’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While AMGN’s candle is BULLISH with HIGH.
EPS Growth Rate: VIAB’s 4.79% versus AMGN’s 5.38%
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 Viacom Inc. (NASDAQ:VIAB) is predicted at 4.79% while Amgen Inc. (NASDAQ:AMGN) stands at 5.38%. These numbers suggest that AMGN 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 VIAB stands at 1.7 while AMGN is at 3.4 whereas the debt ratio of the prior is 1.44 while the debt ratio of the later is 2.31.
The values of the both ratios suggest that AMGN 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 2.7 for VIAB and 2.3 for AMGN which means VIAB has Hold rating whereas AMGN 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 VIAB is $34.91 which is 6.22% of its current price while AMGN has price target of 205 which is -0.28% 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.
VIAB currently has price to earning P/E ratio of 7.24 whereas AMGN has 17.1 while the forward P/E ratio for the prior stands at 7.45 and for the later it depicts the value of 14.11.
The price to Book P/B for VIAB is 1.88, Price to Sale is at 1.06 and for AMGN these ratios stand at 9.04 and 5.82.