The shares of NextEra Energy, Inc. (NYSE:NEE) and Owens Corning Inc (NYSE:OC) were among the active stocks of the last trading sessions. NextEra Energy, Inc. (NYSE:NEE) soared to 0.24% closing at the price of $173.73 whereas the shares of Owens Corning Inc (NYSE:OC) declined -3.44% with the decrease of -1.86 points closing at the price of $52.25. NextEra Energy, Inc. has currently increase 7.88% in its stock over the period of 6-months while its rival Owens Corning Inc subtracted -35.66% 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 NextEra Energy, Inc. (NYSE:NEE) is 6.5% while the ROI of Owens Corning Inc (NYSE:OC) is 7.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NEE’s EBITDA Margin is 13.9 whereas OC’s is 8.91.
Both the profitability ratios suggest a mixed sentiment for NextEra Energy, Inc. (NYSE:NEE) and Owens Corning Inc (NYSE:OC).
EPS & Surprise Factor
NextEra Energy, Inc. (NYSE:NEE) reported $2.11/share EPS for the previous quarter where analysts were predicting an EPS to be $2.06/share Thus beating the analyst Estimates with a Surprise Factor of 2.4 Percent. While, Owens Corning Inc (NYSE:OC) reported EPS of $1.17/share in the last quarter. The analysts projected EPS of $1.45/share depicting a Surprise of -19.3 Percent.
Taking a look at Earnings per Share, NextEra Energy, Inc. tends to be beating the analyst estimates more than Owens Corning Inc. so NEE is more profitable than OC.
Technical Analysis of NextEra Energy, Inc. & Owens Corning Inc
Moving average convergence divergence (MACD) shows that NextEra Energy, Inc. (NYSE:NEE) is on a PRICE RELATIVITY trend While Owens Corning Inc (NYSE:OC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the NextEra Energy, Inc. was in BULLISH territory and Owens Corning Inc was in BEARISH territory.
NEE’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While OC’s candle is BEARISH with LOW.
EPS Growth Rate: NEE’s 9.44% versus OC’s 17.8%
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 NextEra Energy, Inc. (NYSE:NEE) is predicted at 9.44% while Owens Corning Inc (NYSE:OC) stands at 17.8%. These numbers suggest that OC 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 NEE stands at 0.6 while OC is at 1.6 whereas the debt ratio of the prior is 0.99 while the debt ratio of the later is 0.88.
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 1.9 for NEE and 2.3 for OC which means NEE has Buy rating whereas OC 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 NEE is $178.94 which is 2.91% of its current price while OC has price target of 75.5 which is 30.79% 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.
NEE currently has price to earning P/E ratio of 13.97 whereas OC has 15.14 while the forward P/E ratio for the prior stands at 20.76 and for the later it depicts the value of 8.34.
The price to Book P/B for NEE is 2.48, Price to Sale is at 4.89 and for OC these ratios stand at 1.4 and 0.87.