The shares of MFA Financial, Inc. (NYSE:MFA) and Extraction Oil & Gas, Inc. (NASDAQ:XOG) were among the active stocks of the last trading sessions. MFA Financial, Inc. (NYSE:MFA) declined to -0.28% closing at the price of $7.23 whereas the shares of Extraction Oil & Gas, Inc. (NASDAQ:XOG) soared 2.07% with the increase of 0.22 points closing at the price of $10.85. MFA Financial, Inc. has currently decrease -3.21% in its stock over the period of 6-months while its rival Extraction Oil & Gas, Inc. subtracted -10.4% 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 MFA Financial, Inc. (NYSE:MFA) is 3.2% while the ROI of Extraction Oil & Gas, Inc. (NASDAQ:XOG) is 0.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MFA’s EBITDA Margin is NOT AVAILABLE whereas XOG’s is 11.65.
Both the profitability ratios suggest that MFA Financial, Inc. (NYSE:MFA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
MFA Financial, Inc. (NYSE:MFA) reported $0.17/share EPS for the previous quarter where analysts were predicting an EPS to be $0.19/share Thus lagging the analyst Estimates with a Surprise Factor of -10.5 Percent. While, Extraction Oil & Gas, Inc. (NASDAQ:XOG) reported EPS of $0.05/share in the last quarter. The analysts projected EPS of $0.07/share depicting a Surprise of -28.6 Percent.
Taking a look at Earnings per Share, MFA Financial, Inc. tends to be beating the analyst estimates more than Extraction Oil & Gas, Inc.. so MFA is more profitable than XOG.
Technical Analysis of MFA Financial, Inc. & Extraction Oil & Gas, Inc.
Moving average convergence divergence (MACD) shows that MFA Financial, Inc. (NYSE:MFA) is on a PRICE RELATIVITY trend While Extraction Oil & Gas, Inc. (NASDAQ:XOG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the MFA Financial, Inc. was in BEARISH territory and Extraction Oil & Gas, Inc. was in BEARISH territory.
MFA’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While XOG’s candle is BULLISH with MEDIUM.
EPS Growth Rate: MFA’s 3.14% versus XOG’s 30%
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 MFA Financial, Inc. (NYSE:MFA) is predicted at 3.14% while Extraction Oil & Gas, Inc. (NASDAQ:XOG) stands at 30%. These numbers suggest that XOG 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 MFA stands at 0 while XOG is at 0.4 whereas the debt ratio of the prior is 1.84 while the debt ratio of the later is 0.83.
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 2.8 for MFA and 2 for XOG which means MFA has Hold rating whereas XOG has Buy 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 MFA is $7.7 which is 6.1% of its current price while XOG has price target of 18.73 which is 42.07% 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.
MFA currently has price to earning P/E ratio of 9.54 whereas XOG has 0 while the forward P/E ratio for the prior stands at 9.7 and for the later it depicts the value of 7.9.
The price to Book P/B for MFA is 0.9, Price to Sale is at 4.88 and for XOG these ratios stand at 1.2 and 2.16.