The shares of Rockwell Collins, Inc. (NYSE:COL) and Noble Energy Inc. (NYSE:NBL) were among the active stocks of the last trading sessions. Rockwell Collins, Inc. (NYSE:COL) declined to -2.53% closing at the price of $135.14 whereas the shares of Noble Energy Inc. (NYSE:NBL) soared 1.75% with the increase of 0.56 points closing at the price of $32.52. Rockwell Collins, Inc. has currently increase 0.9% in its stock over the period of 6-months while its rival Noble Energy Inc. added 3.47% 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 Rockwell Collins, Inc. (NYSE:COL) is 6.4% while the ROI of Noble Energy Inc. (NYSE:NBL) is -8.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COL’s EBITDA Margin is 16.36 whereas NBL’s is 9.45.
Both the profitability ratios suggest that Rockwell Collins, Inc. (NYSE:COL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Rockwell Collins, Inc. (NYSE:COL) reported $1.73/share EPS for the previous quarter where analysts were predicting an EPS to be $1.84/share Thus lagging the analyst Estimates with a Surprise Factor of -6 Percent. While, Noble Energy Inc. (NYSE:NBL) reported EPS of $0.17/share in the last quarter. The analysts projected EPS of $0.22/share depicting a Surprise of -22.7 Percent.
Taking a look at Earnings per Share, Rockwell Collins, Inc. tends to be beating the analyst estimates more than Noble Energy Inc.. so COL is more profitable than NBL.
Technical Analysis of Rockwell Collins, Inc. & Noble Energy Inc.
Moving average convergence divergence (MACD) shows that Rockwell Collins, Inc. (NYSE:COL) is on a PRICE RELATIVITY trend While Noble Energy Inc. (NYSE:NBL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Rockwell Collins, Inc. was in BEARISH territory and Noble Energy Inc. was in BULLISH territory.
COL’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While NBL’s candle is BULLISH with LOW.
EPS Growth Rate: COL’s 12.27% versus NBL’s 65.15%
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 Rockwell Collins, Inc. (NYSE:COL) is predicted at 12.27% while Noble Energy Inc. (NYSE:NBL) stands at 65.15%. These numbers suggest that NBL 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 COL stands at 1.6 while NBL is at 0.8 whereas the debt ratio of the prior is 1.06 while the debt ratio of the later is 0.64.
The values of the both ratios suggest that COL 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 3.1 for COL and 2.3 for NBL which means COL has Sell rating whereas NBL 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 COL is $133.2 which is -1.46% of its current price while NBL has price target of 42.54 which is 23.55% 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.
COL currently has price to earning P/E ratio of 25.4 whereas NBL has 203.25 while the forward P/E ratio for the prior stands at 17.36 and for the later it depicts the value of 25.13.
The price to Book P/B for COL is 3.27, Price to Sale is at 2.6 and for NBL these ratios stand at 1.54 and 3.33.