The shares of CBRE Group, Inc. (NYSE:CBRE) and Pepsico, Inc. (NASDAQ:PEP) were among the active stocks of the last trading sessions. CBRE Group, Inc. (NYSE:CBRE) declined to -2.04% closing at the price of $41.2 whereas the shares of Pepsico, Inc. (NASDAQ:PEP) declined -0.06% with the decrease of -0.07 points closing at the price of $108.12. CBRE Group, Inc. has currently decrease -12.79% in its stock over the period of 6-months while its rival Pepsico, Inc. subtracted -0.52% 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 CBRE Group, Inc. (NYSE:CBRE) is 10.7% while the ROI of Pepsico, Inc. (NASDAQ:PEP) is 16.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CBRE’s EBITDA Margin is 11.62 whereas PEP’s is 13.5.
Both the profitability ratios suggest that Pepsico, Inc. (NASDAQ:PEP) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
CBRE Group, Inc. (NYSE:CBRE) reported $0.74/share EPS for the previous quarter where analysts were predicting an EPS to be $0.71/share Thus beating the analyst Estimates with a Surprise Factor of 4.2 Percent. While, Pepsico, Inc. (NASDAQ:PEP) reported EPS of $1.59/share in the last quarter. The analysts projected EPS of $1.57/share depicting a Surprise of 1.3 Percent.
Taking a look at Earnings per Share, CBRE Group, Inc. tends to be beating the analyst estimates more than Pepsico, Inc.. so CBRE is more profitable than PEP.
Technical Analysis of CBRE Group, Inc. & Pepsico, Inc.
Moving average convergence divergence (MACD) shows that CBRE Group, Inc. (NYSE:CBRE) is on a PRICE RELATIVITY trend While Pepsico, Inc. (NASDAQ:PEP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the CBRE Group, Inc. was in BEARISH territory and Pepsico, Inc. was in BEARISH territory.
CBRE’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PEP’s candle is BEARISH with HIGH.
EPS Growth Rate: CBRE’s 12.8% versus PEP’s 6.95%
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 CBRE Group, Inc. (NYSE:CBRE) is predicted at 12.8% while Pepsico, Inc. (NASDAQ:PEP) stands at 6.95%. These numbers suggest that CBRE 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 CBRE stands at 1.1 while PEP is at 1.3 whereas the debt ratio of the prior is 0.86 while the debt ratio of the later is 3.41.
The values of the both ratios suggest that PEP 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 1.9 for CBRE and 2.5 for PEP which means CBRE has Buy rating whereas PEP 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 CBRE is $52.72 which is 21.85% of its current price while PEP has price target of 117.86 which is 8.26% 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.
CBRE currently has price to earning P/E ratio of 15.89 whereas PEP has 18.66 while the forward P/E ratio for the prior stands at 12.23 and for the later it depicts the value of 18.06.
The price to Book P/B for CBRE is 3.14, Price to Sale is at 0.81 and for PEP these ratios stand at 14.87 and 2.36.