The shares of Omega Healthcare Investors, Inc. (NYSE:OHI) and TransCanada Corporation (NYSE:TRP) were among the active stocks of the last trading sessions. Omega Healthcare Investors, Inc. (NYSE:OHI) soared to 0.18% closing at the price of $33.1 whereas the shares of TransCanada Corporation (NYSE:TRP) declined -1.19% with the decrease of -0.49 points closing at the price of $40.84. Omega Healthcare Investors, Inc. has currently increase 25.95% in its stock over the period of 6-months while its rival TransCanada Corporation subtracted -2.99% 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 Omega Healthcare Investors, Inc. (NYSE:OHI) is 3.2% while the ROI of TransCanada Corporation (NYSE:TRP) is 4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, OHI’s EBITDA Margin is 18.81 whereas TRP’s is 14.29.
Both the profitability ratios suggest a mixed sentiment for Omega Healthcare Investors, Inc. (NYSE:OHI) and TransCanada Corporation (NYSE:TRP).
EPS & Surprise Factor
Omega Healthcare Investors, Inc. (NYSE:OHI) reported $0.39/share EPS for the previous quarter where analysts were predicting an EPS to be $0.38/share Thus beating the analyst Estimates with a Surprise Factor of 2.6 Percent. While, TransCanada Corporation (NYSE:TRP) reported EPS of $0.65/share in the last quarter. The analysts projected EPS of $0.62/share depicting a Surprise of 4.8 Percent.
Taking a look at Earnings per Share, TransCanada Corporation tends to be beating the analyst estimates more than Omega Healthcare Investors, Inc.. so TRP is more profitable than OHI.
Technical Analysis of Omega Healthcare Investors, Inc. & TransCanada Corporation
Moving average convergence divergence (MACD) shows that Omega Healthcare Investors, Inc. (NYSE:OHI) is on a PRICE RELATIVITY trend While TransCanada Corporation (NYSE:TRP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Omega Healthcare Investors, Inc. was in BULLISH territory and TransCanada Corporation was in BULLISH territory.
OHI’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While TRP’s candle is BEARISH with MEDIUM.
EPS Growth Rate: OHI’s 15.8% versus TRP’s 4.57%
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 Omega Healthcare Investors, Inc. (NYSE:OHI) is predicted at 15.8% while TransCanada Corporation (NYSE:TRP) stands at 4.57%. These numbers suggest that OHI 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 OHI stands at 0 while TRP is at 0.5 whereas the debt ratio of the prior is 1.26 while the debt ratio of the later is 2.02.
The values of the both ratios suggest that TRP 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 for OHI and 1.7 for TRP which means OHI has Hold rating whereas TRP 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 OHI is $30.78 which is -7.54% of its current price while TRP has price target of 54.51 which is 25.08% 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.
OHI currently has price to earning P/E ratio of 79.38 whereas TRP has 21.38 while the forward P/E ratio for the prior stands at 20.27 and for the later it depicts the value of 14.29.
The price to Book P/B for OHI is 1.87, Price to Sale is at 7.46 and for TRP these ratios stand at 2.03 and 3.56.